Gold hits over one-week low after US court blocks most of Trump's tariffs
Spot gold was down 0.5% at $3,273.37 an ounce, as of 0431 GMT, after hitting its lowest since May 20.
U.S. gold futures dropped 0.7% to $3,270.80. A U.S. 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 U.S. 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 U.S. 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. The minutes from the U.S. Federal Reserve's May 6-7 session showed that officials are concerned about the potential for concurrent rises in inflation and unemployment, a scenario that would necessitate a choice between implementing tighter monetary policy to combat inflation or lowering interest rates to support economic growth and employment.
The market now awaits U.S. GDP data due later in the day, with core U.S. Personal Consumption Expenditures data for further cues on rate cut trajectory.
Elsewhere, spot silver rose 0.6% to $33.19 an ounce, platinum was up 0.6% to $1,080.90 and palladium edged 1.3% higher to $974.69.
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