Gold prices rebounded above $3,300 an ounce on Thursday as markets digested a U.S. court ruling striking down former President Donald Trump’s tariff authority—a decision that may further delay Federal Reserve rate cuts this year.
Bill Adams, Chief Economist at Comerica Bank, told Kitco News that the court’s ruling has reinforced the Fed’s reluctance to cut interest rates in 2025. “The administration is appealing the decision, but the uncertainty alone is keeping businesses and consumers cautious,” Adams said.
Despite economic headwinds—including slowing GDP growth and rising jobless claims—Adams noted that the U.S. economy is unlikely to slip into a full-blown recession. However, persistent policy ambiguity will likely keep growth sluggish for the rest of the year. The Fed’s May meeting minutes further cemented expectations that rates will remain steady through at least late 2025.
Spot gold rose 0.6% to $3,307.79/oz by mid-morning ET, recovering from an early dip to $3,245.90 after Asian markets opened. Meanwhile, New York gold futures climbed 1.1% to $3,332.80.
The initial drop followed Wednesday’s court ruling, which briefly boosted risk appetite and weighed on safe-haven demand. Nvidia’s strong earnings further fueled Wall Street optimism, adding downward pressure on bullion. However, gold quickly rebounded as new data showed U.S. weekly jobless claims rising more than expected—a potential sign of labor market softening.
“Gold is rallying on weak jobs data, which could push the Fed to cut rates sooner than expected,” said Tai Wong, an independent metals trader. “But the market is also betting that Trump will ultimately overturn the court’s decision.”
Nick Twidale, Chief Market Analyst at AT Global Markets, noted that while short-term volatility is expected, gold’s long-term uptrend remains intact. “We’ll see bargain hunters step in on dips,” he said.
Goldman Sachs reinforced this view in a Wednesday note, urging investors to increase gold allocations as a hedge against institutional instability. “When both stocks and bonds underperform, gold or oil historically deliver positive returns,” analysts wrote. Given gold’s relatively small market size, even minor portfolio shifts away from U.S. assets could trigger significant price surges.
All eyes are now on Friday’s U.S. PCE inflation data for clues on monetary policy. Meanwhile, gold’s rally continues to defy conventional logic—up over 25% year-to-date and hitting a record $3,500.05/oz last month.
Even without Fed rate cuts, gold’s appeal as a hedge against political and economic uncertainty remains strong. As Adams put it, “The only certainty right now is more volatility—and that’s gold’s best friend.”
