Gold Price Falls Sharply Amid Strong USD and Tariff Clarity

Gold Price Under Heavy Pressure Amid Dollar Strength and Trade Clarity

The price of Gold started the week on the back foot, falling sharply on Monday. The internationally traded spot price of Gold declined by over $50, or 1.6%, to approximately $3,340 per troy ounce. Meanwhile, New York Comex Gold futures slid by $90, or 2.5%, ending the session near $3,400 per troy ounce.

Analysts note the need to distinguish between broader macroeconomic factors weighing on all Gold prices and factors specific to the Comex. On a global scale, the stronger US Dollar and renewed hopes for peace in Ukraine were key bearish forces dragging Gold lower.

Trump Confirms No Tariffs on Gold Imports to US

Adding to the Comex-specific pressure was speculation about potential tariffs on Gold bar imports, especially those significant to the US futures market. However, clarity came from President Donald Trump, who confirmed via a tweet that no tariffs will be applied to Gold imports.

This announcement was especially impactful for Swiss refiners, who had previously halted Gold deliveries to the US due to tariff uncertainty. A top manager at one such refinery welcomed the decision, citing the importance of policy clarity for global supply chains.

Mixed Day for Precious Metals

Other precious metals showed mixed performance in reaction to Gold's decline:

• Silver followed Gold lower, echoing the sell-off.
• Platinum rebounded from its earlier losses.
• Palladium stood out by posting a notable gain.

The divergence reflects the uncertain and varied sentiment in the precious metals market.

US CPI in Focus for Next Directional Move

Looking ahead, traders are bracing for the release of US inflation data (CPI). A moderate reading could ramp up pressure on the Federal Reserve to cut interest rates, potentially lifting Gold prices again.

Should inflation come in softer than expected, the yellow metal may regain some ground, especially as lower interest rates decrease the opportunity cost of holding non-yielding assets like Gold.