Gold prices fell in European trade on Thursday, expanding losses for the fourth straight session and plumbing a week low under pressure from the stronger dollar against major rivals. 

The dollar was boosted after a Manhattan Federal Court suspended Trump’s reciprocal tariffs on most world countries. 

Now investors await crucial US data later today, expected to provide important clues on the odds of Fed rate cuts later this year.

Prices

Gold prices fell 1.3% to $3245 an ounce, a May 20 low, with a session-high at $3295.

On Wednesday, gold lost 0.4%, the third loss in a row on profit-taking away from a two-week high at $3365.

US Dollar

The US dollar index rose over 1% on Thursday, expanding gains for the third straight session to a two-week high at 100.54 against a basket of major rivals.

A stronger dollar makes the greenback-denominated gold futures less attractive to holders of other currencies.

The dollar’s advance is also boosted as US recession concerns decidedly diminished alongside global trade tensions.

Trump’s Tariffs Suspension 

The US Court of International Trade in Manhattan deemed US reciprocal tariffs on imports of other currencies as illegal. 

The order, judged by a three-member panel, focuses on the exclusive rights of Congress to decide on tariff policies, and not the president.

Trump’s use of emergency economic powers to impose the aggressive tariffs was deemed illegal by the court.

It’s a massive blow to Trump’s ability to use tariffs to threaten world governments with tariffs to force them to acquiesce to hit demands. 

US Rates

According to the Fedwatch tool, the odds of a June 0.25% interest rate cut by the Federal Reserve stood at just 6%.

The odds of a July rate cut stood at 25%.

Markets now expect 50 basis points of total rate cuts by the end of the year, starting October.

SPDR

Gold holdings at the SPDR Gold Trust rose 3.15 tons yesterday to a total of 925.61 tons, a May 15 high.

The euro fell in European trade on Thursday against a basket of major rivals, expanding losses for the third straight session against the dollar and plumbing a two-week trough after a US court order suspending Trump’s tariffs.

Hot inflation data and bullish remarks from ECB officials led to divisions among policymakers on the rate decision in June, with investors awaiting German and Spanish inflation data this week to gather more clues. 

The Price

The EUR/USD price fell 0.7% today to $1.1210, a May 10 trough, with a session-high at $1.1297.

The euro fell 0.1% against the greenback on Wednesday on profit-taking away from a four-week high at $1.1419.

US Dollar

The dollar index rose over 1% on Thursday, expanding the gains for the third straight session and hitting a two-week high at 100.54 against a basket of major rivals.

Trump’s Tariffs Suspension 

The US Court of International Trade in Manhattan deemed US reciprocal tariffs on imports of other currencies as illegal. 

The order, judged by a three-member panel, focuses on the exclusive rights of Congress to decide on tariff policies, and not the president.

Trump’s use of emergency economic powers to impose the aggressive tariffs was deemed illegal by the court.

It’s a massive blow to Trump’s ability to use tariffs to threaten world governments with tariffs to force them to acquiesce to hit demands. 

It led to a massive dollar surge against main rivals, including above 148 yen, with global stocks rallying as  well.

European Rates

Recent eurozone data showed inflation rose past estimates in April, renewing pressures on ECB policymakers. 

ECB President Christine Lagarde said the euro could be a practical alternative to the dollar if governments managed to bolster the financial and security structures in the EU.

Now markets estimate a less than 50% likelihood for a 0.25% ECB rate cut in June.

The Japanese yen tumbled in Asian trade on Thursday against a basket of major rivals, expanding losses for the fourth straight session against the dollar and plumbing a two-week trough as markets celebrate a US trade court’s rule to suspend Trump’s tariffs on most countries. 

Safe havens were pressured further by Nvidia’s forecast-beating earnings results for the first quarter of the year despite export restrictions to China.

The Price

The USD/JPY price rose over 1% to 146.29, the highest since May 15, with a session-low at 144.74.

The yen lost 0.35% on Wednesday against the dollar as US recession concerns receded. 

Trump’s Tariffs Suspension 

The US Court of International Trade in Manhattan deemed US reciprocal tariffs on imports of other currencies as illegal. 

The order, judged by a three-member panel, focuses on the exclusive rights of Congress to decide on tariff policies, and not the president.

Trump’s use of emergency economic powers to impose the aggressive tariffs was deemed illegal by the court.

It’s a massive blow to Trump’s ability to use tariffs to threaten world governments with tariffs to force them to acquiesce to hit demands. 

It led to a massive dollar surge against main rivals, including above 148 yen, with global stocks rallying as  well.

Nvidia’s Results

Nvidia reported forecast-beating results in the first quarter of the 2025 financial year, boosted by strong demand on AI tech, especially in the data centers sector.

Nvidia marked record earnings of $44.06 billion, passing estimates of $43.31 billion, in a 12% surge from the previous quarter, and a 69% yearly surge.

The company reported profits of 96 cents per share, passing estimates of 93 cents, with net income rising to $18.8 billion, up from $14.9 billion in the same period last year.

The company nonetheless expects to lose $8 billion of sales due to export restrictions to China.

The Federal Reserve released the minutes of its May meeting, which showed the bank expects one or two 0.25% interest rate cuts by the end of the year. 

The Federal Open Market Committee sees Trump’s April tariffs as highly detrimental to the global risk sentiment. 

However, such an impact was largely reversed in the opinion of the FOMC following measures that opened the door for trade negotiations. 

The minutes added that Trump’s trade policies weakened GDP growth outlook in 2025 and 2026 according to estimates by Fed economists.