Weekly Gold Price Prediction: 2nd to 8th June 2025

Gold Performance in May ‘25

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On a monthly basis, gold remained unchanged, trading around $3300. It went up and down $150 during the month of May. 

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Gold failed to make a decisive move in either direction as markets digested US tariff news and mixed data releases.

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Over the previous weekend, US President Donald Trump announced that he had agreed to extend the tariff deadline on European imports until July 9 after holding a phone conversation with European Commission President Ursula von der Leyen.

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This development helped improve the risk mood at the beginning of the week and caused gold to lose interest as a safe-haven asset. 

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Nevertheless, gold losses remained limited as financial markets in the US were closed on Monday in observance of the Memorial Day holiday.

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The minutes of the Federal Reserve’s May policy meeting showed on Wednesday that officials saw elevated uncertainty about the economic outlook. 

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Participants noted they may face difficult trade-offs if inflation proved more persistent, while outlooks for growth and employment weakened.

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Meanwhile, the Court of International Trade announced that President Trump's reciprocal tariffs will be blocked from going into effect, explaining that Trump exceeded his authority by imposing across-the-board duties on imports from the US's trading partners. 

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In response, the Trump administration has filed a notice of appeal, questioning the court's authority. 

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As this headline boosted the USD immediately, gold extended its weekly slide and fell to its lowest level in over a week, dropping below $3250.

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The second estimate of the US GDP for the first quarter of 2021 showed a contraction of -0.2% quarter-over-quarter, which is an improvement from the preliminary estimate of -0.3%. 

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The final data release of the week from the US showed that the annual inflation in the US, as measured by the change in the PCE Price Index, declined to 2.1% in April from 2.3% in  March. 

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Gold largely ignored this data and remained in the lower half of the weekly range, below $3300.

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Gold Price Forecast

According to the CME FedWatch Tool, markets are currently pricing in about a  25% probability of a 25 basis points (bps) rate cut in July. Market participants will pay close attention to comments from Fed officials throughout the week. 

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The Fed’s blackout period will start on June 7, and policymakers could look to steer expectations in a certain direction. 

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Should the Fed express its preference to reduce the policy rate only once in 2025, the USD may experience sustained strength, potentially leading to an extended decline in gold prices. 

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The CME FedWatch Tool indicates that markets still expect a nearly 70% chance of the Fed opting for at least two 25-basis-point interest rate cuts this year.

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In between all the data releases and Fed commentaries, headlines surrounding  US trade relations could affect the risk mood. 

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A positive shift in sentiment, with the US announcing new deals with partners, could cause gold to stay under selling pressure. 

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If Trump adopts an aggressive tone and extends his tariff threats to the EU and other nations, the precious metal could benefit from safe-haven flows. 

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Disclaimer: The recommendations and opinions shared by experts regarding the stock market and other asset classes are their own. These views do not reflect the official stance or position of Jar.

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