Gold Prices Dip as Dollar Strengthens and Tariff Uncertainty Persists

Gold prices dropped on Friday, ending May with their first monthly loss of 2025. The dip was attributed to a firmer U.S. dollar and continued uncertainty over trade tariffs.

Spot gold dropped 0.6 percent to $3,297.09 per ounce by 9:38 a.m. ET, a decline of 1.8 percent for the week. U.S. gold futures also fell 0.7% to $3,295.40. The dollar index gained 0.2%, which made gold more expensive for holders of other currencies.

A federal appeals court has temporarily reinstated sweeping tariffs that US President Donald J. Trump, had placed on imported solar panels. The move followed a U.S. trade court decision, a day earlier, that had found Trump had overstepped his authority when imposing those duties. The resurrection amplified market swings and investor unease.

"It doesn't look like initially gold will be so much in favor since there's a little bit less need for safe haven, but there are going to be significant restraints on Trump, and that ultimately will pop up prices," said David Meger, director of metals trading at High Ridge Futures.

In economic news, the U.S. Personal Consumption Expenditures (PCE) Price Index increased 2.1% y/y in April, below expectations of a 2.2% rise. This relatively benign inflation data helped keep alive hopes that the Federal Reserve may yet cut interest rates in the coming months. Lower rates are generally good for gold, which doesn't offer a yield and stands to be pressured as the opportunity cost of holding the metal lessens.

In India, gold continued to be unattractive this week as prices domestically grew higher and the wedding season came to an end. Dealers cut discounts to $31 an ounce from $49 a week ago. In the domestic market, gold was trading at around ₹94,900 per 10 grams after falling to a one-month low.

Spot silver fell 0.6% to $33.14 an ounce. Platinum fell 1.6 percent to $1,065.50, and palladium lost 1 percent to $963.57.