The latest downturn in gold prices comes as global risk appetite improves following a U.S. federal court ruling that blocked former President Donald Trump’s “Liberation Day” tariffs. The Court of International Trade found that Trump had exceeded his authority by attempting to impose blanket tariffs on imports from all countries. The decision sparked optimism in financial markets, triggering a rally in equities and reducing demand for traditional safe-haven assets like gold.
At the same time, the Federal Reserve’s latest meeting minutes, released Wednesday, reinforced a cautious stance on interest rates. Policymakers indicated a preference to keep rates on hold amid continued uncertainty over the broader economic outlook and policy impacts. This hawkish tone helped push the U.S. Dollar Index (DXY) above the 100 mark, adding further downward pressure on the non-yielding metal.
Despite the risk-on sentiment, some factors are providing support to gold. Investors remain concerned about the deteriorating U.S. fiscal position, which has led to mild intraday weakness in the dollar. Additionally, ongoing geopolitical tensions—including U.S. plans to restrict exports of advanced technologies to China and renewed military action between Israel and Yemen’s Houthi rebels—are preventing deeper losses in gold, as traders remain cautious.
Israel confirmed a second airstrike in a month on Houthi targets at Yemen’s Sanaa airport after a series of missile attacks on its territory. Meanwhile, Russia has proposed new peace talks with Ukraine, suggesting Istanbul as the venue for a June 2 meeting. The Kremlin reportedly seeks a written assurance from Western powers to halt NATO’s eastward expansion, under pressure from Trump to reach a settlement.
Looking ahead, market participants await a series of U.S. economic reports due Thursday, including preliminary Q1 GDP data, initial jobless claims, and pending home sales. However, the main focus remains on Friday’s release of the Personal Consumption Expenditures (PCE) Price Index—considered the Federal Reserve’s preferred inflation gauge.
For now, gold prices remain vulnerable as long as they stay below the $3,300 threshold, with the 200-period simple moving average on the four-hour chart serving as a key technical support level.
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