GOLD Analysis
Gold Dips Below $3,260 as Tariff Ruling Eases Safe-Haven Flows and Fed Remains Cautious
Highlights
- U.S. Court orders removal of Trump’s reciprocal tariffs, easing trade-war fears and denting gold’s safe-haven bid below $3,260.
- Fed minutes underscore a patient “wait-and-see” stance amid inflation and unemployment risks, supporting a firmer dollar and higher real yields.
- April’s surge in U.S. gold exports to Switzerland shifts global supply dynamics, adding to bullion’s near-term headwinds.
Overview:
Gold has softened to approximately $3,280 per ounce (current market price) and dipped below $3,260 on a confluence of legal, monetary, and trade-flow developments that have collectively diminished its safe-haven allure. A decisive catalyst was the recent ruling by the U.S. Court of International Trade, which held that President Trump had exceeded his statutory authority when imposing reciprocal 10–25% tariffs on a range of foreign goods—including precious metals. The court ordered the permanent removal of those tariffs, removing a significant near-term source of market anxiety. While the administration has signaled its intent to appeal, the ruling alone has already eased fears of a broader trade escalation.
Simultaneously, the release of the Federal Reserve’s latest minutes painted a picture of policymakers firmly in “wait-and-see” mode. Fed officials acknowledged elevated risks to both inflation and employment, yet refrained from telegraphing imminent policy adjustments. That dovish restraint—coupled with the legal retreat on tariffs—has strengthened the U.S. dollar, lifting real yields and raising the opportunity cost of holding non-yielding bullion.
Adding another layer of complexity, U.S. gold exports to Switzerland surged in April after Congress lifted precious-metal duties, altering global trade flows. Swiss refiners and vaults are once again seeing robust inflows from American producers, which may eventually translate into increased supplies in international markets.
Looking ahead, attention turns to a quartet of high-impact U.S. data releases this week: preliminary Q1 GDP growth, the GDP price index, weekly unemployment claims, and pending home-sales figures. Each will shed light on the balance between growth, inflation pressures, and labor-market resilience, all critical inputs to the Fed’s policy calculus and, by extension, to gold’s yield-relative appeal.
Technical Levels and Strategy
- Support: $3,240 (recent swing low)
- Resistance: $3,300 (psychological cap)
- Action: With gold trading at $3,280, consider selling from CMP, targeting $3,245, and placing a stop-loss above $3,315 to protect against headline-driven reversals.