(Kitco News) – Gold prices staggered lower this week as conflicting statements and court rulings on tariffs ultimately saw many market participants tune out the noise to trade the charts and the data, which proved less dramatic than the headlines.
Spot gold kicked off the week trading at $3,351.67 per ounce, with Asian and European traders testing lows near $3,325 per ounce while U.S. traders enjoyed the Memorial Day holiday on Monday.
Monday evening saw the week's first drama in precious metals markets, as the Asian open drove gold from $3,350 per ounce at 8:00 p.m. EDT all the way down to $3,288 per ounce by 7:45 a.m.
Spot gold had recovered to exactly $3,300 per ounce by Tuesday's North American open, however. Apart from a few tests of support, the $3,300 level held until Wednesday morning, when it was U.S. traders’ turn to drive gold prices lower. Spot gold declined from $3,301 at 9:30 a.m. EDT through a series of staggered selloffs to the weekly low just above $3,250 per ounce by 7:30 p.m.
At these levels, the yellow metal was attractive to investors once again, and after a second retest of the weekly low shortly after 9:30 p.m. EDT on Wednesday evening, gold prices saw their first strong gains of the week, ultimately topping out at $3,330 per ounce by noon Eastern on Thursday.
But these levels couldn't hold, as the Asian session drove gold back below $3,300 once again, and after a final sharp dip down to $3,276 per ounce just after the North American open, traders were content to let the yellow metal trend within $10 of the $3,300 resistance level into Friday's close.
The latest Kitco News Weekly Gold Survey showed industry experts and retail traders holding a much more balanced view of the yellow metal’s price potential after a weak showing this week, though bulls still outnumbered bears in both camps.
“Higher,” said Rich Checkan, president and COO of Asset Strategies International. “The gold price has consolidated around $3,300 and seems poised for higher… especially if the appeals court ruling on tariffs holds. Plus, a ‘Big Beautiful Tax Bill’ that adds more deficit spending is close to passing the Senate. All roads point to monetary expansion and price inflation.”
“Higher,” said Adam Button, head of currency strategy at Forexlive.com. “The TACO thing triggered Trump, and now he's looking for a fight. Gold at the moment is moving on the trade war, and he will want to reestablish credibility.”
“The downside risks are around the courts, as I believe the Supreme Court will ultimately block some tariffs,” Button added.
Adrian Day, president of Adrian Day Asset Management, expects to see more back and forth in gold next week, but he doubts any decline will be deep or long-lasting, as there appear to be buyers waiting on the dips.
Day thinks that even though markets have been very Trump-centric amid the on-again, off-again trade tariffs, the real drivers of gold predate this administration, and the Russia-Ukraine war, and they’re not going anywhere.
“Let's go back basically three years, to the Fall of 2022,” he said. “Gold was already going up meaningfully, long before Trump entered the White House, and before most people thought he would win. If you step back from it, I don't think gold's move has been driven by tariffs. That's just been one additional thing, to add to Gaza, and Ukraine, and to everything else.”
Day said the fundamental drivers of gold have not gone away and have not changed. “Clearly, the central banks want to diversify their holdings away from the dollar in the face of dollar weaponization, which was going on long before Trump came along,” he said. “That's been a theme for the last 20 years. If you go back to the year 2000, non-U.S. central banks had about 75% to 80% of non-domestic currency reserves in the U.S. dollar. That's been going down over the last 25 years – five years ago it was at around 65% – so that's a pretty big decline for institutions that tend to be slow moving.”
“All of that long-term move has nothing to do with Trump and nothing to do with tariffs,” Day said. “But I would say that nothing that has happened this year would make central banks think, ‘I don't think we need gold, let's buy back our dollars.’”
Looking ahead to next week’s employment report, Day said that with the Fed effectively taking monetary policy moves off the table, the major data releases are much less important than they were.
“If you had jobs numbers that were so bad that people thought the Fed would have to cut sooner rather than later, I think that would be very positive for gold,” he said. “But I think a little bit up or a little bit down is not of interest anymore.”
Day said that in the current environment, he expects gold to continue consolidating with a slight downward bias on positive news. “I think a continuation of moderately positive, or shall we say, not-negative news, could just see gold drift, but drift downwards,” he said. “I don't see anything in the near term that would cause a sharp decline.”
What would drive gold back toward the $3,500 all-time high are budget developments in the U.S., which are correlated with longer-dated Treasuries. “If, for example, the Senate were to reject the ‘big, beautiful bill,’ which I don't think is out of the question – you could get four Republicans voting no if no Democrat supports, or more likely you could get the Senate passing a different bill that then needs a lot of reconciliation between the House version and the Senate version –the failure of Trump's ‘big, beautiful bill’ could send gold moving higher,” he said. “And we're coming to a funding crisis by the end of summer if something doesn't give, which again, was coming completely independently of Trump anyway.”
Day added that if we start to see rates moving up on the 10-year Treasury note, “that will add pressure on the Fed to either cut rates, or much more certain, for the Fed itself to institute QE and start buying the bonds itself. And that's very gold-bullish.”
This week, 14 analysts participated in the Kitco News Gold Survey, with Wall Street adopting a more wait-and-see posture after this week’s declines. Six experts, or 43%, expected to see gold prices rise during the week ahead, while four analysts, or 29%, predicted price declines for the yellow metal. The remaining four analysts, or 29%, saw gold trading sideways next week.
Meanwhile, 2490 votes were cast in Kitco’s online poll, with Main Street bulls maintaining a narrow majority following gold’s underwhelming performance. 163 retail traders, or 56%, looked for gold prices to rise next week, while 70, or 24%, expected the yellow metal to trade lower once again. The remaining 57 investors, representing 20% of the total, saw prices consolidating during the week ahead.
| TIME | |||||
|---|---|---|---|---|---|
| Sydney | Tokyo | Ha Noi | HongKong | LonDon | NewYork |
| Prices By NTGOLD | ||
|---|---|---|
| We Sell | We Buy | |
| 37.5g ABC Luong Bar | ||
| 6,549.10 | 6,009.10 | |
| 1oz ABC Bullion Cast Bar | ||
| 5,460.20 | 4,960.20 | |
| 100g ABC Bullion Bar | ||
| 17,337.30 | 15,737.30 | |
| 1kg ABC Bullion Silver | ||
| 1,870.90 | 1,475.90 | |
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