Gold’s Roller Coaster Week Ends With Fed, Trade Jitters

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.

Here’s what you need to know:

1. Gold briefly soared above $3400/oz Tuesday before retreating, highlighting market volatility in the absence of hard economic data.

2. Markets initially responded to tariff pullback rumors with optimism, pushing gold higher, but risk-on sentiment took over midweek.

3. Despite Fed rate cut speculation, gold closed down 0.3% WoW, showing trader preference for equity risk amid trade thaw talk.

4. Next week’s GDP, jobs data, and the FOMC decision could bring the volatility back, setting gold’s next direction.

Not only has this been a week with very little in the way of macroeconomic data critical to pricing trends for gold or for correlated classes like the US Dollar (even the “most important” data set of the week—initial jobless claims—landed within touching distance of expectations and with a yawn—our snoozer of a week has fallen in the dead of summer, where there’s rarely any tangible, traditional market action to trade off of. As a result, we’ve been able to track how gold trades in a vacuum, save for the ongoing narratives of the Trump Tariff strategy for trade and the ongoing effort to predict when the FOMC will cut interest rates. This week, that track looks like a roller coaster.

With no concrete events or data reports to map to the yellow metal’s movement, it’s been a week of waves that include one surprisingly high crest, and a few troughs that briefly threatened gold’s recent lines of support. Where gold rose to its peak of the week (spending roughly 24 hours, including all of Tuesday’s New York trading session, well above $3400/oz), headlines and other vectors for the market’s narrative and mood painted a picture of expectations for the Trump Administration, whether they got what they “wanted” or not, pumping the brakes on recent threats to enact tariffs and duties of as much as 50% on some of the US’ most important trade partners.

At the time, and even into Wednesday morning’s trading which eventually saw a quick sell-off, one thing we inferred from this was that the market saw improving economic stability in the US as such a promising sign that the Fed could begin cutting interest rates again sooner, that investors and managers chose to trade that projection rather than simply trading based on a reduced chance of economic calamity and recession (which we would have expected to push gold prices lower in favor of risk assets).