Tariff Uncertainty Sparks Gold Rally From One-Week Low
LONDON (May 29) Gold price rebounds after tariff ruling weakens the dollar. Legal uncertainty and Fed rate outlook support a bullish near-term gold market forecast.
Gold Prices Rebound as Dollar Rally Stalls Following Tariff Ruling
Gold edged higher on Thursday after recovering from earlier losses triggered by a brief surge in the U.S. dollar and Treasury yields. The yellow metal dipped to a one-week low early in the session as safe-haven demand favored the dollar following a U.S. federal court’s surprise block of President Trump’s latest tariff initiative. However, a quick reversal in dollar strength allowed gold to claw back gains.
Court Ruling Against Trump’s Tariffs Sparks Dollar Volatility
The U.S. Court of International Trade ruled that President Trump had overstepped his authority by imposing blanket tariffs on imports under the International Emergency Economic Powers Act (IEEPA). The decision halted the so-called “Liberation Day” tariffs and cast uncertainty over future trade policy. The administration filed an immediate appeal, signaling the legal battle could escalate to the Supreme Court.
The court’s move initially sent the dollar sharply higher on safe-haven flows, with the greenback touching a two-week high against the yen and posting gains against the Swiss franc. However, sentiment reversed mid-session as traders weighed the prospect of prolonged legal uncertainty rather than immediate tariff enforcement. The dollar index fell off session highs, easing pressure on gold.
Treasury Yields Rise as Fed Rate Cut Odds Ease
Daily US Government Bonds 10-Year Yield
U.S. Treasury yields climbed, adding weight to gold’s early weakness. The 10-year yield rose to 4.53%, while the 30-year hit the closely watched 5% level. Minutes from the latest Fed meeting highlighted concerns that inflation could remain elevated, particularly if trade tensions persist. Traders scaled back expectations for a July rate cut to just 20%, with September odds at around 60%, down from earlier in the month.
FXEmpire
