Gold Pulls Back As Traders Rotate Into Dollar And Bonds

Happy Friday, traders. Welcome to our weekly market wrap, where we take a look back at these last five trading days with a focus on the market news, economic data, and headlines that had the most impact on gold prices and other key correlated assets— and may continue to in the future.

1. Gold prices declined this week, ending near $3225/oz despite negative economic news.

2. Q1 GDP unexpectedly contracted, but gold prices fell instead of rising.

3. Mixed April jobs data added confusion, failing to spark a rally in safe-haven assets.

4. Investor rotation into the Dollar and Treasury markets added further pressure on gold.

Gold prices remain at eye-watering highs, historically speaking. Nonetheless, weakness as a result of the precious metal appearing deeply over-extended has allowed prices to slip lower.

Rhetoric and messaging (to different levels of effectiveness) regarding the Trump Tariff plan haven’t really died down over the last several days, but it has become less concrete and, as a result, less impactful on market pricing for gold. We did receive two top-tier data reports on US economic health this week, but that the gold market reactions have moved prices inverse to what would typically be expected demonstrates that the most dominant factor for the yellow metal this week was that spot prices had (as of last week) become considerably over-bought and under-supported at the recent record highs.

First up, on Wednesday, we received the first estimate of GDP growth in the US economy for Q1 2025, which unexpectedly reported a contraction in the world’s largest economy. (To be comprehensive, it should be noted that in assessing the first volleys and parries of the Trump Administration’s trade and economic policies, consensus expectations were only looking for a barely measurable expansion.)

Expressing that the US economy is now, in the most rudimentary terms, halfway to a full-on recession, we would have expected another rally in gold as the precious metal has been so clearly the preferred safe-haven in 2025 against economic uncertainty. Instead, prices, which had already slid back to $3300/oz to begin the week, took another skid lower on Wednesday to $3235. The next Asian trading session would then knock gold down enough to briefly challenge support at $3200/oz before a Thursday rebound.

We’ve repeated the pattern on Friday morning, though in finer increments. The change in non-farm payroll numbers for April was an odd combination of undramatic and still open to interpretation by investors, tilted in either emotional direction. The US added 177K jobs last month, a healthy beat vs. expectations of 130K, but the prior month’s strong number was also revised lower by roughly the same delta.