Gold prices rebounded on Thursday, climbing back above $3,300 an ounce, as markets processed a U.S. court ruling that struck down former President Donald Trump’s tariff authority. The decision has added fresh uncertainty to the economic outlook and may further delay interest rate cuts by the Federal Reserve.
Fed Rate Cuts in Doubt Despite Economic Headwinds
Bill Adams, Chief Economist at Comerica Bank, said the court’s decision—though under appeal—has heightened policy uncertainty and reinforced the Fed’s cautious stance.
“The administration is appealing the decision, but the uncertainty alone is keeping businesses and consumers cautious,” Adams told Kitco News. Despite slowing GDP growth and rising unemployment claims, Adams noted that a full-blown recession remains unlikely. However, he expects economic growth to remain subdued through the rest of 2025.
Minutes from the Fed’s May meeting signaled that policymakers are unlikely to cut interest rates before late 2025, further dampening expectations of near-term monetary easing.
Gold Bounces Back After Early Dip
Spot gold rose 0.6% to $3,307.79 per ounce by mid-morning Eastern Time, rebounding from an earlier low of $3,245.90 following the opening of Asian markets. U.S. gold futures advanced 1.1% to $3,332.80.
The initial drop in gold prices followed Wednesday’s court ruling, which temporarily boosted investor risk appetite and diminished demand for safe-haven assets. Strong quarterly earnings from Nvidia also added to market optimism, placing further pressure on gold.
However, the precious metal quickly regained ground after data showed U.S. weekly jobless claims rising more than expected, suggesting potential weakness in the labor market.
“Gold is rallying on weak jobs data, which could push the Fed to cut rates sooner than expected,” said Tai Wong, an independent metals trader. “But the market is also betting that Trump may ultimately succeed in overturning the court’s decision.”
Long-Term Outlook: Bullish Sentiment Holds
Despite short-term volatility, analysts remain broadly bullish on gold’s long-term trajectory. Nick Twidale, Chief Market Analyst at AT Global Markets, said dips in price are likely to attract bargain hunters.
Goldman Sachs echoed this view, urging investors to increase gold allocations in light of rising institutional risks and sustained central bank buying. In a research note, the firm pointed out that gold and oil have historically outperformed when both stocks and bonds falter. Given gold’s relatively small market size, even modest shifts in investor sentiment away from U.S. assets could drive substantial gains.
Looking Ahead
Investors now turn their attention to Friday’s release of U.S. Personal Consumption Expenditures (PCE) inflation data for further clues on the Fed’s monetary policy path.
Gold remains up more than 25% year-to-date and hit a record high of $3,500.05 an ounce earlier this month. Even in the absence of imminent rate cuts, its appeal as a hedge against political and economic volatility continues to strengthen.
As Adams put it: “The only certainty right now is more volatility—and that’s gold’s best friend.”
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