Gold price drops 1% following Trump comments, inflation data

[Redator]

Gold prices dropped more than 1% on Friday as markets digested the latest tariff developments, while a softer inflation report in the US kept hopes for a rate cut alive.

Spot gold fell back below $3,300 an ounce during the morning session, trading at $3,281.24 for an intraday gain of 1.1% by 10:45 a.m. ET. US gold futures also fell 1.1% to $3,307.40 an ounce in New York.

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Meanwhile, the US dollar index ticked 0.3% higher to make gold more expensive for buyers.

Gold traded lower despite renewed tensions between the US and China, with US President Donald Trump claiming that China had violated their trade agreement. On Thursday, Treasury Secretary Scott Bessent called negotiations with China “a bit stalled,” which fueled uncertainty in global markets.

“Gold, at this point in time, is pulling back off these recent highs and is in a consolidation period,” said David Meger, director of metals trading at High Ridge Futures, in a Reuters note.

“Gold is under slight pressure as we’re seeing a little lesser need for safe haven, but it does look like there is going to be significant pushback from Trump and that will eventually help prices.”

New data on Friday showed the US personal consumption expenditures (PCE) price index rose 2.1% year on year in April, versus a 2.2% forecast. After the report, traders doubled down on bets that the Federal Reserve will cut its target for short-term borrowing costs this September.

Bullion, which thrives in a low-interest rate environment and periods of high inflation and economic uncertainty, has been one of the top-performing assets this year, gaining more than a quarter. Last month, it set a new record high of $3,500.05 an ounce.

(With files from Reuters)