Market sentiment has improved notably following a U.S. federal court ruling that blocked former President Donald Trump’s proposed “Liberation Day” tariffs. The Court of International Trade ruled that the tariffs, which targeted imports from all countries, exceeded presidential authority. The decision boosted investor confidence and triggered a rally in equity markets, weighing on traditional safe-haven assets such as gold.
This renewed risk appetite comes amid lingering concerns about U.S. monetary policy. Minutes from the Federal Reserve’s May meeting, released Wednesday, revealed that officials are inclined to maintain current interest rates in the near term, citing uncertainty over the broader economic impact of recent policy shifts. The hawkish tone helped push the U.S. Dollar Index (DXY) above the 100 mark, adding further downward pressure on non-yielding gold.
Despite this, some market participants continue to price in potential rate cuts by the Fed in 2025. Additionally, concerns over the United States’ worsening fiscal position have led to bouts of U.S. dollar selling, offering modest support to gold. Persistent geopolitical tensions are also limiting aggressive bearish positioning on gold ahead of key U.S. data releases.
Geopolitical developments continue to influence market dynamics. The Biden administration is reportedly preparing new export restrictions on critical U.S. technologies, including semiconductor manufacturing tools and certain chemicals, aimed at China. Meanwhile, Israel confirmed that its air force struck targets linked to Yemen’s Houthi rebels at Sanaa airport—its second such strike this month—after recent missile launches from the group.
In Europe, Russia has proposed a new round of peace talks with Ukraine, scheduled for June 2 in Istanbul. Moscow reportedly seeks written guarantees from Western powers to halt further NATO expansion eastward, amid pressure from Trump-aligned figures to end the war.
Traders now await several key U.S. economic indicators due Thursday, including preliminary first-quarter GDP data, weekly initial jobless claims, and pending home sales. However, markets are primarily focused on Friday’s release of the Personal Consumption Expenditures (PCE) Price Index, the Fed’s preferred inflation gauge.
Technically, gold remains vulnerable below the $3,300 level, with the 200-period simple moving average on the four-hour chart acting as key support.
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