Gold prices declined by more than 1% during today’s trading session, impacted by the U.S. administration’s announcement to ease the effect of tariffs on domestically manufactured auto parts. This move helped calm prevailing market concerns over escalating trade tensions with China, leading to a decrease in demand for gold as a safe haven—especially after it had recorded record highs in recent weeks.
Investor expectations are now focused on several key U.S. economic indicators to be released this week, most notably:
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April employment data
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Q1 GDP figures
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The Personal Consumption Expenditures (PCE) Price Index, considered one of the most important inflation gauges.
The outcomes of these data releases will be critical in shaping market trends and future expectations regarding the U.S. Federal Reserve’s decisions on interest rates.
In the base metals market, copper prices experienced relative stability as investors continued to monitor any new developments in the trade negotiations between the United States and China. Although Chinese officials reaffirmed their readiness to support sectors affected by U.S. tariffs, no new stimulus packages have been announced, keeping copper prices mostly unchanged amid a general atmosphere of caution.
In the currency market, the U.S. dollar rose during Tuesday’s session, supported by reports of Washington’s intention to reduce tariffs on the automotive sector. This move helped restore some market stability and boosted the dollar’s performance by 0.15%. Despite this slight rebound, the dollar is still on track to record its worst monthly performance since late 2022, due to declining appetite for U.S. assets.
Meanwhile:
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The euro slipped slightly against the dollar but maintained strong gains over the month, supported by investors’ move away from the greenback.
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The British pound remained near its three-year highs against the dollar, bolstered by investors’ efforts to diversify their portfolios away from U.S. assets.
Outlook:
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Gold: If employment, GDP, and PCE data point to continued strength in the U.S. economy, gold may face additional downward pressure, with the potential to break key support levels in the short term.
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Dollar: The dollar’s performance will largely depend on the outcome of this week’s data. Any positive surprises could support a recovery in the U.S. currency, while negative results would likely accelerate its losses.
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Copper: Copper prices will remain tied to developments in U.S.-China trade relations. Any signs of a comprehensive trade agreement could drive prices higher, while ongoing uncertainty may keep markets volatile.
