Gold Falls for Fourth Day as U.S. Court Blocks Trump Tariffs

Gold prices have declined for the fourth consecutive day, as a U.S. federal court's decision to block former President Donald Trump's "Liberation Day" tariffs has shifted investor sentiment away from safe-haven assets.

Court Ruling Eases Trade Tensions

On May 28, 2025, the U.S. Court of International Trade ruled that Trump's sweeping tariffs, imposed under the International Emergency Economic Powers Act (IEEPA), exceeded presidential authority and were unconstitutional. The court emphasized that long-standing trade imbalances did not constitute an "unusual and extraordinary threat," a requirement under IEEPA.

This ruling has been perceived as a significant check on executive power and has alleviated concerns over escalating trade wars, leading to a rally in global equity markets and a strengthening of the U.S. dollar.

Impact on Gold Prices

Gold, traditionally a safe-haven asset during times of economic uncertainty, has seen a decrease in demand following the court's decision. Spot gold prices stabilized at $3,302.22 per ounce, while U.S. gold futures settled at $3,300.60. Analysts suggest that the easing of trade tensions has reduced the immediate need for risk-averse investments.

Additionally, the market is now focusing on upcoming U.S. economic data, particularly the core Personal Consumption Expenditures (PCE) report, which may influence future Federal Reserve interest rate decisions. The Fed has maintained rates at 4.25%-4.50% since December, amid uncertainties over the economic impacts of tariffs.

Broader Market Reactions

The court's decision has had a ripple effect across global markets. Asian and European equities experienced significant gains, while U.S. stock futures surged, buoyed further by strong earnings reports from major companies like Nvidia. The U.S. dollar appreciated against other major currencies, and Treasury yields increased, reflecting renewed investor confidence.

In India, equity benchmarks are poised for a positive opening, with the Gift Nifty futures indicating an upbeat start. Foreign portfolio investments have also seen a boost, contributing to the overall positive market sentiment.

Conclusion

The blocking of Trump's "Liberation Day" tariffs by the U.S. federal court has significantly altered the investment landscape, reducing the appeal of safe-haven assets like gold and invigorating global equity markets. As investors await further economic data and potential Federal Reserve actions, market dynamics continue to evolve in response to these pivotal developments.

Note: This blog post is based on information available as of May 29, 2025.Source ET, W, Reuters, Etc..