Gold recovers quickly after US court ruling on Trump's tariffs – Commerzbank
The price of Gold briefly fell below the USD 3,250 per troy ounce mark on Thursday after it was announced that a US court had declared most of the tariffs imposed by US President Trump to be illegal, Commerzbank's Head of FX and Commodity Research Thu Lan Nguyen notes.
Gold can benefit continuing high demand for safe havens
"It pointed out that only the US Congress could regulate trade with other countries. However, the precious metal recovered quickly as it was unclear whether the tariffs would be suspended immediately. In the evening, an appeals court ruled that the court ruling would be paused for the time being and that the tariffs would therefore remain in effect."
"Furthermore, the court ruling primarily concerned reciprocal tariffs, but not sectoral tariffs on aluminium and steel, for example. The US government could therefore focus more on these instead of country-specific tariffs."
"The trade conflict is therefore far from over, which means that the economic outlook remains gloomy and expectations of interest rate cuts are likely to remain strong. In addition to the continuing high demand for safe havens, Gold could also benefit from this."
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FXStreet Insights Team
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