Gold Price Declines Amid Stronger Dollar and US Auto Tariff Relief
Gold prices (GC=F) fell today due to expectations that President Donald Trump will ease the impact of his auto tariffs, reducing haven demand for the precious metal. The decline comes amid hopes that the US will dial back its trade tensions, further affecting the global economy and the demand for gold as a safe-haven asset.
Gold dropped as much as 1.2%, reaching $3,305.23 per ounce after a 0.7% increase in the previous session. The price movement followed an announcement by a White House official that some levies on foreign automobile parts would be lifted. Additionally, imported cars and trucks would be exempted from tariffs on aluminum and steel. The strengthening of the US dollar also contributed to gold’s decline, making the precious metal more expensive for foreign buyers, as gold is priced in US dollars.
Impact of US Trade War and Auto Tariff Reprieve on Gold Prices
Gold traders are closely monitoring the ongoing trade war and its effects on the global economy. Heightened uncertainty surrounding the US-led trade conflict has driven demand for gold, which saw record highs in recent months. This week, the market is looking for economic data related to US job growth, inflation, and overall economic performance, which could influence the next steps in the tariff negotiations.
Dilin Wu, a research strategist at Pepperstone Group Ltd., commented on the shift in market sentiment. “The White House’s willingness to engage in trade talks has eased panic selling, leading to cautious optimism and putting downward pressure on gold,” Wu said.
Gold Price Outlook: Will US Economic Data Drive Another Surge?
Despite the recent decline in gold, the market remains on edge. If upcoming US reports show signs of weakness in the labor market, the expectation for a rate cut by the Federal Reserve in June could reignite another upward surge in gold prices, according to Wu.
The trade war with China remains unresolved, with a top Chinese diplomat warning other nations against succumbing to Trump’s tariff threats. Meanwhile, US Treasury Secretary Scott Bessent stated that the US is temporarily putting China aside in the tariff battle, placing the onus on Beijing to take the first step toward de-escalation. The Chinese Foreign Ministry also denied ongoing talks with Washington regarding tariff reductions.
Gold Prices and Global Economic Uncertainty
Gold has surged more than 25% in 2025, driven by the trade war, global slowdown concerns, and the ongoing friction between the Trump administration and the Federal Reserve. The rally in gold has been further supported by inflows into gold-backed exchange-traded funds (ETFs), central-bank buying, and strong speculative demand in China, even as physical gold consumption in the world’s largest buyer declines.
As of 1:53 PM in Singapore, gold for immediate delivery traded 0.9% lower at $3,313.06 per ounce. The Bloomberg Dollar Spot Index rose by 0.2%, while silver and palladium prices also declined, with platinum showing little change.
Conclusion: Gold Prices Remain Sensitive to Trade Tensions and Economic Data
With global trade tensions continuing to influence the gold market, traders will remain focused on upcoming economic reports. Gold prices could either stabilize or rebound based on the developments in the US labor market and economic growth. For investors, the path of US tariffs and the dollar’s strength will be key drivers of gold’s future performance.
