Gold Slips as Trade Fears Ease and Dollar Shines: A Bumpy Road Ahead

Gold prices dipped by 0.67% on March 24, 2025, settling at $3,002 per ounce, as easing global trade tensions and a stronger U.S. dollar curbed the metal’s upward momentum.

The decline marked the third consecutive day of losses for gold, driven by news that the Trump administration plans to impose targeted reciprocal tariffs on specific U.S. trading partners—dubbed the “Dirty 15″—starting April 2, rather than enacting broad measures against most nations.

This shift in policy, as reported by Bloomberg, alleviated fears of widespread trade disruptions, boosting Wall Street’s positive mood and sending stock indices higher. Despite the recent pullback, gold has still gained an impressive 13% over the past year, underscoring its resilience amid shifting economic currents.

The U.S. dollar’s strength and rising Treasury yields played a significant role in pressuring gold prices downward. The U.S. Dollar Index (DXY), which measures the dollar against a basket of six major currencies, climbed 0.20% to 104.35.

Meanwhile, the yield on the 10-year U.S. Treasury note surged eight basis points to 4.331%, and real yields on 10-year Treasury Inflation-Protected Securities edged up nearly two basis points to 1.980%. These increases in yields, which often move inversely to gold prices, sapped bullish momentum from the yellow metal.

Market sentiment was further shaped by mixed economic data from S&P Global’s Flash PMIs, which revealed a sharp contraction in U.S. manufacturing activity—dropping from 52.7 to 49.8, below the anticipated 51.7—while the services sector surged ahead, rising from 51.0 to 54.3 and exceeding expectations of 50.8. This divergence highlights ongoing industrial weakness, partly fueled by tariff-related uncertainties, contrasted with robust service-sector growth.

Adding to the complex backdrop, Atlanta Fed President Raphael Bostic signaled a cautious approach to monetary policy, projecting just one interest rate cut for 2025 and suggesting that inflation may not hit the Fed’s target until 2027. Bostic described the path to stable inflation as “very bumpy” but expressed confidence that the Federal Reserve would not fall behind the curve.

Money markets, according to Prime Market Terminal data, have priced in 62.5 basis points of Fed easing for 2025, reflecting tempered expectations for aggressive rate cuts.

Last year, The Wall Street Journal identified the U.S.’s largest goods trade deficits with countries like China, the EU, Mexico, and Vietnam—many of which overlap with the so-called Dirty 15 now facing tariff scrutiny. As gold bears push prices toward the $3,000 mark, the interplay of targeted trade policies, dollar strength, and cautious Fed guidance continues to shape the metal’s near-term trajectory.