Gold prices drop as US court blocks Trump tariffs and Fed Minutes strengthen Dollar

Gold (XAU/USD) prices have been under pressure recently. A US court ruling blocked tariffs proposed by former President Trump. This decision supported risk-on sentiment, which hurt gold. Meanwhile, the US dollar continues to gain strength following hawkish FOMC minutes. As a result, gold has continued to decline in response to recent market developments. Despite this, ongoing trade tensions and fiscal uncertainty in the US have helped limit further losses in the metal.

Gold prices fall as US court blocks Trump tariffs and Dollar strengthens

Gold lost ground after the US federal court blocked Trump's "Liberation Day" tariffs. Investors welcomed the decision, which fueled gains in equity markets and reduced the appeal of gold as a safe-haven asset. This shift in sentiment triggered a move away from bullion.

At the same time, the US dollar rallied following the release of the Federal Reserve’s meeting minutes. Policymakers showed a clear agreement to keep interest rates unchanged while assessing the economic outlook. A stronger dollar makes gold more expensive for foreign buyers, further dampening demand. Better-than-expected U.S. economic data also eased recession fears, driving more investors toward riskier assets like stocks.

Despite this, uncertainty remains as reports indicate the US may restrict tech exports to China, escalating trade tensions. This could eventually revive safe-haven interest in gold. Additionally, Russia’s proposal for peace talks with Ukraine introduces a new variable. A successful negotiation might lower geopolitical risks and reduce gold's appeal, but investor caution persists until there is more clarity. Economic strength and a stronger dollar are putting downward pressure on gold. However, ongoing geopolitical and trade concerns are continuing to provide underlying support.

Bullish channel intact, but triangle signals key breakout ahead

The gold chart below shows price action within a clear ascending channel. The channel has held strong since late 2024. This upward sloping structure suggests an overall bullish trend. Several buy signals appeared after price broke out of triangle patterns. These triangles acted as continuation patterns in the broader uptrend. Each breakout was followed by sharp moves higher.

Currently, gold is testing the lower boundary of the ascending channel. This also aligns with a descending triangle pattern. Price has struggled to break above the upper trend line of the triangle. The recent candles show selling pressure near $3,300. If price breaks below the triangle support and channel line, a deeper correction could follow. The next major support zone lies near $3,200.

However, if bulls defend this lower channel boundary, the price could bounce and aim for $3,400 again. Watch for a breakout above the triangle to confirm bullish momentum. Volume and momentum indicators support caution. Momentum has weakened since April. This aligns with the current consolidation. A breakout from the triangle—either up or down—could guide the next major move.

Conclusion

Gold remains under pressure from a stronger dollar and improved risk appetite, but key support levels and global uncertainties still offer some stability. While legal and economic shifts have weakened gold’s appeal, technical patterns suggest a critical turning point. If the Bulls defend current support, a rebound remains possible. However, a breakdown could signal deeper losses. Traders should stay alert, as upcoming geopolitical and economic events may trigger the next major move.

Unlock exclusive gold and silver trading signals and updates that most investors don’t see. Join our free newsletter now!