Gold prices took a hit as the U.S. dollar climbed, driven by fresh economic data and simmering trade disputes, Bloomberg reported on Friday.
Traders dissected U.S. consumer spending figures and a sharp drop in imports, while tensions with China added pressure. The metal’s failure to breach a key price threshold only deepened the slide.
Gold prices fell as the dollar strengthened, with markets reacting to U.S. economic signals and trade frictions with China. The precious metal, often a safe-haven asset, couldn’t hold its ground. Spot gold dropped 0.9% to $3,289.25 an ounce by midday in New York.
Consumer spending in the U.S. slowed in April, signaling caution among households. This dip came alongside a significant decline in imported goods, as companies grappled with higher tariffs. The data painted a complex picture for traders eyeing economic stability.
President Donald Trump pointed fingers at China, claiming the country was sidestepping a trade deal struck earlier in the month. His remarks fueled uncertainty in markets already jittery about global trade flows. The accusation landed as gold struggled to find footing.
Treasury Secretary Scott Bessent echoed the sentiment, noting trade talks with Beijing were “a bit stalled.” His words underscored the challenges of navigating a fractured economic relationship. Gold, sensitive to such geopolitical ripples, felt the strain.
The Federal Reserve’s preferred price gauge held steady, suggesting inflation wasn’t pushing the central bank toward rate cuts anytime soon. With borrowing costs likely unchanged until later in the year, gold’s appeal as a non-yielding asset dimmed. Traders adjusted their bets accordingly.
Gold’s price action hit a wall, failing twice to break the $3,328 resistance level. “The price action in gold has twice failed to break above the key near-term resistance level of $3,328,” said Kelvin Wong, senior analyst at Oanda Asia Pacific Pte. This technical stumble contributed to the metal’s 2% weekly loss.
Despite the weekly setback, gold’s yearly performance remained robust, up 25% driven by its safe-haven allure. Uncertainties tied to Trump’s tariff policies kept investors leaning on the metal for security. Yet, the recent dip signaled short-term headwinds.
Silver, palladium, and platinum also saw declines, mirroring gold’s downward trend. The broader precious metals market reflected the same pressures weighing on gold. Tariff impacts and dollar strength spared no corner of the sector.
The U.S. dollar’s advance was a key driver behind gold’s retreat. A stronger dollar makes gold pricier for foreign buyers, curbing demand. This dynamic played out as traders parsed the latest economic and trade developments.
April’s drop in U.S. imports highlighted the real-world effects of higher tariffs. Companies, adjusting to the new trade landscape, scaled back on foreign goods. This shift rippled through markets, bolstering the dollar’s climb.
Gold’s 2% weekly loss followed a nearly 5% gain the previous week, showing its volatile dance with global events. The metal’s failure to push past $3,328 kept technical traders on edge. Wong’s analysis of the resistance level rang true for market watchers.
Despite the downturn, gold’s 25% yearly gain underscored its enduring role as a hedge against uncertainty. Trump’s tariff policies, with their unpredictable fallout, kept investors circling back to the metal. Its safe-haven status held firm amid the noise.
Trade tensions with China showed no signs of easing, with Trump and Bessent’s comments signaling a rocky road ahead. The stalled talks added another layer of doubt for markets. Gold, though bruised, remained a go-to for wary investors.
As the dollar flexed its muscle and economic data rolled in, gold’s path forward looked murky. The Federal Reserve’s steady stance on rates offered little relief for the metal. For now, traders braced for more twists in this high-stakes financial saga.
