Gold Prices Slide as Trump’s EU Tariff Delay Cools Safe-Haven Demand, Yet U.S. Fiscal Woes Persist

May 26, 2025, Singapore — Gold prices edged lower on Monday as U.S. President Donald Trump’s decision to postpone 50% tariffs on European Union goods until July 9 reduced trade-related tensions, diminishing the metal’s appeal as a safe-haven asset. Trading near $3,350 an ounce, gold saw a 0.3% decline after a robust 5% gain last week, driven by earlier fears of escalating trade conflicts.

Despite the dip, gold’s outlook remains supported by growing concerns over the U.S. government’s fiscal health, following Moody’s recent downgrade of the U.S. credit rating. Meanwhile, platinum prices soared to a two-year high, fueled by supply concerns and strong demand from China’s jewelry market, highlighting divergent trends in precious metals.

Easing Trade Tensions Impact Gold’s Safe-Haven Status

On Sunday, President Trump announced a delay in imposing sweeping tariffs on EU goods, extending the deadline to July 9 to allow for negotiations. This move followed his Friday warning of higher-than-expected levies on the EU and a 25% tariff threat against Apple Inc. unless it shifts iPhone production to the U.S. The softened stance alleviated some market anxieties, leading to a pullback in gold prices, with spot gold dropping to $3,346.82 an ounce by 7:22 a.m. in Singapore.

Real-time market data shows gold trading approximately $150 below its record high from last month. However, investor concerns about the U.S. fiscal deficit, exacerbated by Trump’s tax bill passing the House and awaiting Senate approval, continue to bolster gold’s role as a hedge against economic uncertainty.

Did You Know?
Gold has surged over 25% in 2025, outperforming many asset classes, driven by trade uncertainties and U.S. fiscal challenges, according to global market reports.

Platinum Shines Amid Supply and Demand Dynamics

Platinum extended its rally, climbing 11% last week—its strongest weekly gain in over four years—and reaching a two-year high on Friday. The surge is driven by fears of a supply deficit and renewed jewelry demand in China, alongside platinum’s critical role in automotive catalytic converters. Real-time updates indicate sustained buying interest in China, with industrial demand further tightening the market. Unlike gold, which thrives on geopolitical and fiscal instability, platinum’s price reflects both industrial and investment-driven momentum, making it a standout performer among precious metals.

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Market Outlook Amid U.S. Economic Data and Holiday Closure

The Bloomberg Dollar Spot Index remained stable, while silver and palladium prices showed little movement. The delay in EU tariffs has supported risk-sensitive assets, with emerging market currencies gaining ground. However, gold’s longer-term appeal is underpinned by fiscal concerns, particularly as Moody’s downgrade highlights risks from the U.S.’s growing deficit. Investors are closely watching upcoming U.S. economic data, including durable goods sales and consumer sentiment, which could influence Federal Reserve policy and gold prices.

With U.S. markets closed for Memorial Day, trading volumes are expected to be lower, potentially amplifying volatility. Social media sentiment reflects cautious optimism, with some investors betting on gold’s resilience despite short-term fluctuations.