Gold has fallen significantly from the all-time high level reached in April. Gold has reached its lowest levels in two weeks and is currently under pressure for the third consecutive day. After creating an all-time high level of $3,500, the gold price has slipped over 7% to trade around $3,232. Over the last year, gold is up by 40% in the international markets.

Gold thrives in economic uncertainty, which has been fueled by Trump tariffs disrupting trade relations between countries. The easing of trade tensions between the U.S. and its trading partners has dented the metal’s safe-haven appeal.

President Trump has announced potential trade deals with India, South Korea, and Japan, aiming to convert his tariff policy into trade agreements.

Trump signed an executive order to relax 25% tariffs on automobiles and auto parts, while the US dollar strengthened, making gold less attractive to other currency buyers. The US Dollar index went above 100 intraday on May 1.

The big news is on America’s growth slowdown captured by the recent GDP numbers. The U.S. GDP figure for the first quarter was down 0.3%, as opposed to the 0.4% quarterly increase that was anticipated. Additionally, the April U.S. ADP national employment report was a huge disappointment, as it showed a gain of 62,000 jobs instead of the 120,000 that was anticipated.

These weak economic numbers will propel the US Fed to start cutting rates sooner rather than later. When rates begin to fall, gold prices get a boost. Will the US Fed cut the rate in the next FOMC meeting on May 6-7, or will it wait till June 17-18? It remains to be seen. The April 2025 CPI data are scheduled to be released on May 13, which could cause the Fed to stay put in May.

The long-term outlook for gold is still supportive. Recently, billionaire investor John Paulson predicted that central bank gold purchases and conflicts in international trade would drive bullion prices to about $5,000 an ounce by 2028.

For the rest of 2025, gold is expected to remain around the current levels. A Reuters poll predicts an annual gold price above $3,000 for the first time, driven by global trade friction and a shift away from the U.S. dollar, with a median forecast of $3,065 per troy ounce. The earlier estimates were around $2,700 for the full year 2025.

Analysts are looking at the recent dip as a temporary effect of profit booking and some good news on the tariff negotiations. Gold has run up a lot, and some correction looks obvious when there are no fresh triggers to boost prices higher. Gold rate in India is Rs 94,710, down over 5% from the all-time high of Rs 1 lakh reached on April 22.

Also Read: Is the gold price rally losing steam after soaring 42% in a year?