In Thursday’s North American trading session, the price of gold (XAU/USD) showed a strong recovery, climbing back from its weekly low of $3,245 earlier in the day to reach $3,320. This was due to the US Dollar (USD) losing its early gains following a legal setback for President Donald Trump’s tariff policy.
The US Dollar Index (DXY), which measures the Greenback against six major currencies, initially rose but later declined to around 99.50. This decrease in the US Dollar makes gold a more attractive investment for traders.
According to a report by the Associated Press (AP), a federal court in New York accused President Trump of violating the limits set by the International Emergency Economic Powers Act (IEEPA) in order to impose tariffs. The court has ordered the administration to lift these tariffs within ten days, but the White House immediately appealed the decision.
In April, Trump announced tariffs for all of his trading partners and added extra duties for Canada, Mexico, and China, citing border issues and illegal drug trade. These tariffs were imposed under the IEEPA. This decision suggests that tariffs on automobiles, steel, aluminum, and semiconductors by Trump will remain in place.
The White House has expressed confidence that the ruling against tariffs will be overturned. According to White House Economic Adviser Kevin Hassett in an interview with Fox Business Network, they are “confident in the success of the tariff ruling appeal.”
The price of gold has recovered from its earlier losses, but is currently struggling around the upward-trending trendline at $3,335 on a daily basis, which was established from the high of $2,726 on December 12. The short-term trend for the precious metal remains bullish as it hovers around the 20-day Exponential Moving Average (EMA) at $3,286.
The 14-day Relative Strength Index (RSI) is currently trading between 40.00 and 60.00, indicating indecisiveness among traders.
Looking ahead, the key resistance level for gold is likely to be around $3,440, which was the high on May 7. On the downside, the May 15 low of $3,120.83 will serve as a crucial support zone.