The bullion asset declined today amid a surge in risk appetite.
Gold fell after a federal court ruling on President Donald Trump’s trade tariffs led to a rally in risk-on assets.
Gold had already been losing value throughout the week following Trump’s decision to increase tariffs on Europe, which fueled greater risk appetite and reduced demand for safe-haven assets.
Additionally, a three-session rebound in the U.S. dollar added pressure on the gold market.
Spot gold dropped to $3,273.19 per ounce, while gold futures for August fell below $3,300 per ounce. Gold has declined by 2.5 percent this week, facing significant profit-taking after reaching record highs the previous week.
Gold weakened alongside the Japanese yen as Wednesday’s court ruling boosted risk appetite.
The U.S. Court of International Trade ruled that Trump could not impose tariffs on virtually all economies without oversight, citing congressional authority in the imposition of sweeping tariffs.
The court allowed 10 days for compliance with the ruling, prompting the White House to immediately file an appeal.
The appeal triggered limited judicial influence over the upper chamber of Congress, enabling a narrow set of rulings to proceed without being mired in contentious bipartisan debates.
This previously acute uncertainty surrounding Trump’s tariff policies was somewhat alleviated by expectations that the legislation would pass swiftly through Congress. However, experts warn that the situation could ultimately result in even greater confusion by the end of the legal process. Trump continues to emphasize reliance on these materials, issuing urgent warnings regarding national security and military readiness—raising concerns about America’s dependence on overseas mineral trade.
Gains in riskier markets indicated that investors, at least temporarily, were pricing in the possibility that Trump’s tariffs might be lifted. Following the court’s decision, the dollar rose sharply, with markets anticipating that halting the tariffs would reduce uncertainty around the U.S. economy.
Nonetheless, most metals also recorded losses earlier in the week due to a stronger dollar, limiting broader net gains. Silver futures rose 0.5 percent to $33.33 per ounce, while platinum futures increased 0.2 percent to $1,078 per ounce.
The London Metal Exchange’s benchmark copper futures also rose 0.2 percent to $9,586 per ton, while U.S. copper futures increased 0.2 percent to $4.95 per pound. Thursday’s market focus shifts to additional U.S. economic data, particularly an updated gross domestic product (GDP) reading for the first quarter. In April, preliminary GDP figures showing an unexpected contraction had contributed to rising gold prices.
CBN urged to back the Naira with Gold
The Chartered Institute of Treasury Management has urged Nigeria’s monetary authorities to consider using gold reserves to strengthen the Naira. The Institute’s Registrar, Mr. Adedoyin Olumide, presented a detailed plan to restore confidence in the national currency.
- Although Nigeria does not currently operate under a gold standard, Olumide suggested that the Central Bank of Nigeria (CBN) could support the Naira by establishing a partial gold reserve system.
- He also emphasized the need to formalize Nigeria’s informal artisanal gold mining sector through licensing and regulatory reforms. With support from foreign refineries and investment in mining technology, Olumide recommended that the CBN adopt a policy of purchasing gold directly from licensed local miners.
- The Federal Government’s objective to purchase gold using the Naira aims to stimulate confidence, enhance economic credibility, and deepen gold reserves. This was underscored by the successful execution of the first commercial transaction under the National Gold Purchase Program (NGPP).
Fatimah Shinkafi, Executive Secretary of the Solid Minerals Development Fund, stated that Nigeria—through the Ministry of Solid Minerals Development—is working to join the ranks of countries that buy gold with local currencies to boost economic confidence and create a stable investment climate.
Nigeria’s Minister of Mines announced that the country has signed an agreement with South Africa to boost collaboration in the mining sector.
He noted that Nigeria holds an estimated 200 million metric tons of gold reserves spread across several states, including Zamfara, Oyo, Osun, Kogi, Kwara, Kaduna, Bauchi, and Abia. The recent court ruling strengthened the U.S. dollar, leading to a decline in trading values for gold and other metals.
Additionally, Nigeria and South Korea plan to cooperate on mining initiatives, including geological mapping, mineral data collection, and mineral exploration. Beyond oil, Nigeria is rich in gold, limestone, lithium, iron ore, and zinc, with approximately 23 commercially viable mineral deposits.
