On a monthly basis, gold remained constant at about $3300, fluctuating by $150 up and down throughout the month. As markets processed the news of US tariffs and conflicting data releases, gold was unable to make a clear move in either direction.

Following a phone call with Ursula von der Leyen, the president of the European Commission, US President Donald Trump stated over the previous weekend that he had reached an agreement to extend the tariff deadline on European imports until July 9. As a result of this event, gold lost appeal as a safe-haven asset and the risk mood improved at the start of the week. Despite this, gold losses were minimized because US financial markets were closed on Monday in honour of Memorial Day.

According to the Federal Reserve’s May policy meeting minutes released on Wednesday, officials were extremely confused about the state of the economy. Participants pointed out that if inflation continued to rise, they might have to make tough trade-offs, and jobs and growth prospects dimmed.

The Court of International Trade, meantime, declared that President Trump’s reciprocal tariffs would not be implemented, citing his abuse of power in putting universal charges on goods from the US’s trading partners. In a notice of appeal, the Trump administration has questioned the court’s jurisdiction. Gold’s weekly decline continued, as it hit $3250, its lowest level in more than a week, as the headline’s quick reaction helped the USD decline.

The first estimate of -0.3% QoQ contraction for the first quarter of 2025 was surpassed by the second estimate of -0.2%. Meanwhile, according to the US’s last data release of the week, the country’s annual inflation rate, as determined by the PCE Price Index movement, decreased from 2.3% in March to 2.1% in April. Gold mostly disregarded this information and continued to trade below $3300 in the lower half of the weekly range.

Markets are currently pricing in a 25% chance of a 25 basis point rate drop in July, according to the CME FedWatch Tool. Throughout the week, market players will closely monitor the Fed officials’ remarks. On June 7, the Fed will begin its blackout period, and policymakers may try to influence expectations in a certain way. The USD may gain strength over time and pave the way for a prolonged drop in gold prices if Fed commentary suggests that the central bank would like to lower the policy rate only once in 2025. Markets continue to believe that there is a nearly 70% possibility that the Fed will choose to implement at least two 25 basis point interest rate reductions this year, according to the CME FedWatch Tool.

Amidst all the data releases and Fed commentary, headlines about US trade relations could influence the risk mood in Gold Markets. If the US announces new agreements with its partners, a positive shift in sentiment could keep gold under selling pressure. Conversely, if Trump takes an aggressive stance and extends his tariff threats to the EU and other countries, the precious metal could benefit from safe-haven flows.