Gold holds firm as markets digest court roadblock on tariffs

30/05/2025 02:25 AST

Gold prices rose in volatile trading on Thursday, aided by softer jobs data, while market participants also digested a court ruling that blocked most of U.S. President Donald Trump's tariffs.

Spot gold reversed course to rise 0.9% to $3,319.22 an ounce, as of 09:37 ET (1337 GMT), after hitting its lowest since May 20 earlier in the session.

U.S. gold futures were steady at $3,294.60.

Data showed that the number of Americans filing new applications for unemployment benefits increased more than expected last week.

"Gold is rallying on a jump in weekly initial jobless claims which could be a harbinger of a weakening labor market, which would get the Federal Reserve to cut (interest rates) more quickly," said Tai Wong, an independent metals trader.

According to released minutes of the Federal Reserve's May 6-7 session, Fed officials acknowledged they could face "difficult tradeoffs" in coming months in the form of rising inflation alongside rising unemployment, an outlook buttressed by Fed staff projections of increased risks of a recession.

Bullion is viewed as a hedge against uncertainty and inflation, and it tends to perform well in low-interest rate environments, as it does not generate interest.

Market focus is also on the U.S. Personal Consumption Expenditures data due Friday, which will be closely analysed for signals on future U.S. monetary policy.

"Equally impressive is gold's sharp recovery overnight, (with the market) deciding that Trump will ultimately prevail against the trade court's ruling," Wong added.

A U.S. trade court ruling that blocked most of Trump's tariffs and found he had overstepped his authority triggered some relief on financial markets, while adding to the uncertainties weighing on the global economy.

His administration immediately said it will appeal and analysts said investors will remain cautious as the White House explores its legal avenues.

Spot silver rose 0.9% to $33.28 an ounce, platinum was up 1% at $1,085.59 and palladium firmed 0.6% to $968.43.

Reuters