The price of gold has rebounded from its weekly low of $3,245 and has climbed above $3,300 on Thursday, boosted by a weaker US job report and positive market reaction to a US court’s decision to block President Donald Trump’s tariffs. As of writing, XAU/USD is trading at $3,318, representing a 0.94% gain. The US Department of Labor’s report showed that the number of Americans filing for unemployment benefits was higher than expected and the previous week’s data. This adds pressure on the Federal Reserve to implement policies to address the increasing risk of unemployment. The news, along with confirmation of a decline in the US Gross Domestic Product (GDP) in Q1 2025, caused the US Dollar to weaken, further boosting the price of gold.
In other developments, it was reported by Bloomberg late on Wednesday that the US Court of International Trade, composed of a three-judge panel, deemed the Trump administration’s imposition of tariffs on numerous countries as illegal. This decision has freed Mexico, Canada, and China from the previously imposed tariffs on the grounds of border security and fentanyl trafficking. However, tariffs on aluminum, automobiles, and steel still remain. The Trump administration intends to appeal the ruling, and Goldman Sachs anticipates that tariffs will continue via other legal means.
The announcement of the court’s decision prompted a rally in global stocks. Gold prices experienced a sharp decline, and the US Dollar Index (DXY), which tracks its value against six currencies, reached a weekly high of 100.54. However, the DXY has since dropped by 0.50% to 99.32.
Investors are waiting for the release of the US Federal Reserve’s preferred inflation indicator, the Core Personal Consumption Expenditures (PCE) Price Index, later this week.
Gold prices have resumed their upward trend, and at the time of writing, spot prices are near the daily high of $3,325 on May 28. A daily close above this level is necessary for XAU/USD to aim for $3,350. If this level is surpassed, the next key resistance levels are $3,400 and the swing high of $3,438 on May 7. Beyond that, Gold’s next target is $3,500.
On the downside, if the price of gold falls below $3,300, it could pave the way for a decline to $3,250. If this level is breached, the next support level is at the 50-day Simple Moving Average at $3,217.