Gold touched a more than one-week low on Thursday after a US federal court blocked President Donald Trump’s “reciprocal tariffs”, dampening the metal’s safe-haven allure, while a robust dollar further pressured prices of the precious metal.
Spot gold was down 0.5 percent at $3,273.37 an ounce after hitting its lowest since May 20.
US gold futures dropped 0.7 percent to $3,270.80.
A US trade court on Wednesday halted the enforcement of Trump’s tariffs, ruling the president exceeded his authority by imposing universal duties on imports from nations with a trade surplus with the United States.
The US court’s decision is the key news driver leading to a rally in the dollar, which subsequently pushed gold prices lower, said Nicholas Frappell, global head of institutional markets at ABC Refinery.
On April 2, Trump had levied “reciprocal tariffs” on multiple countries, stoking fears of a global recession. However, many of those country-specific tariffs were paused a week later.
Following the trade court’s ruling, the US dollar index rallied, making greenback-priced gold more expensive, with Wall Street futures and Asian equities also climbing.
Meanwhile, the Trump administration filed a notice of appeal, challenging the court’s authority and signalling a potential escalation to the Supreme Court if necessary.
But the gold market is still bullish as “longer term outlook suggests a weaker dollar and there’s still likely to be some inflationary pressures near term,” Frappell said.
