Gold's rally broke down in May. It's still doing better than stocks.
Gold futures fell 0.5% to $3,288.90 per troy ounce in May to snap a four-month winning streak, with the metal marking its biggest monthly decline in five months, according to Dow Jones Market Data.
Gold is still up 25.1% this year, far outpacing the S&P 500's 0.5% 2025 gain.
The price of gold's retreat has coincided with a broader stock market rally. Investors bought gold in April as worries about the U.S. spiked amid President Donald Trump's trade war, so some market participants took profits as tensions faded.
It's no coincidence that gold hit a record of $3,411.40 per troy ounce on May 6 before retreating: that's right when the White House said Treasury Secretary Scott Bessent would meet with China to discuss trade.
Talks between the U.S. and China took place on May 10 in Switzerland. Gold pulled back while stocks rallied the following week, as traders reacted to news the U.S. would lower tariffs on China to 30% while both sides hammered out a deal.
Fundstrat's head of technical strategy Mark Newton argues that precious metals like gold look to be near the end of their recent consolidation, meaning they could push back to fresh records in the months ahead.
'Safe-Haven trades like Japanese Yen and Gold should be starting to turn back higher, and I expect that Equities can still rally despite this happening into mid-June," Newton wrote in a Friday note. 'I favor Industrials, Financials, Technology and Utilities, while Emerging markets also have appeal given the drop in the US Dollar."
Of course, the next move for gold may have more to do with the Trump administration's trade talks with China. Tensions have been higher in recent days, with Bessent saying on Thursday that talks had 'stalled."
Trump on Friday said China has 'totally violated its agreement with us." U.S. Trade Representative Jamieson Greer later that day told CNBC that China failed to restore exports of some rare-earth magnets used for electric motors.
'Recently, China has repeatedly raised concerns with the US regarding its abuse of export control measures in the semiconductor sector and other related practices," Liu Pengyu, a Chinese embassy spokesperson, said in a statement on Friday. 'China once again urges the US to immediately correct its erroneous actions, cease discriminatory restrictions against China and jointly uphold the consensus reached at the high-level talks in Geneva."
The market isn't taking the latest back and forth too seriously: Stocks barely moved on Friday. And gold? It fell 0.9%.
Write to Connor Smith at connor.smith@barrons.com
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Indian Express
42 minutes ago
- Indian Express
US probing Adani Group link to Iran LPG trade, says report; firm calls it ‘baseless, mischievous'
Prosecutors in the US are investigating whether Indian businessman Gautam Adani's companies imported Iranian liquefied petroleum gas (LPG) into India through the Adani Group's Mundra port, despite US sanctions on Iran, The Wall Street Journal reported on Monday. This comes at a time when the Trump administration is rolling back on the enforcement of certain white-collar crimes, including cases related to foreign bribery and sanctions evasion. Tankers travelling between Mundra in Gujarat and the Persian Gulf exhibited traits common to ships evading sanctions, the WSJ report said. The US Justice Department is reviewing the activities of several LPG tankers used to ship cargoes to Adani Enterprises, it said. In a statement, the Adani Group said the report was 'baseless and mischievous'. 'Adani categorically denies any deliberate engagement in sanctions evasion or trade involving Iranian-origin LPG. Further, we are not aware of any investigation by US authorities on this subject,' it said. 'The WSJ's story appears to be based entirely on incorrect assumptions and speculation. Any suggestion that Adani Group entities are knowingly in contravention of US sanctions on Iran is strongly denied. Any assertion to the contrary would not only be slanderous but also deemed to be an intentional act to injure the reputation and interests of the Adani Group,' the statement said. 'The rights of Adani Group entities and personnel in this regard are expressly reserved.' Earlier, US President Donald Trump had warned that any country or person buying oil or petrochemicals from Iran would face immediate secondary sanctions, effectively barring them from doing business with the US. Trump made this statement in a post on his social media platform, Truth Social, emphasising that such entities would not be allowed to engage in any form of business with the US. This warning is apparently part of Trump's 'maximum pressure' campaign against Iran, aimed at completely shutting down the country's oil exports. Trump accused Iran of financing militant groups and emphasised the need to prevent Iran from developing a nuclear bomb. His comments appear to be directed at China, which imports over 1 million barrels per day from Iran. But US sanctions are unlikely to impact Iranian oil flowing to China, unless the White House targets Beijing's state-owned enterprises and infrastructure. Trump has taken a tough stand on Iran, including pulling the US out of the nuclear agreement negotiated by former President Barack Obama. This move is consistent with his earlier decision to impose secondary tariffs on countries buying oil from Venezuela, another OPEC member. The implications of these sanctions and tariffs will likely have far-reaching consequences for the global oil market and US relations with key players like China and Iran. The investigation into the Adani Group's alleged import of Iranian LPG comes at a time when the US administration is easing enforcement of white-collar crimes. The rollback on the enforcement of certain types of white-collar crimes, including cases related to foreign bribery, public corruption, money laundering and crypto markets, came after Trump signed an executive order directing the US Justice Department to halt prosecuting Americans accused of bribing foreign officials to secure overseas business deals. At the Justice Department, Attorney General Pam Bondi has ordered prosecutors to focus their anti-money-laundering and sanctions-evasion attention on drug cartels and international crime organisations. It says the administration is effectively redefining what constitutes a crime in some business conduct cases. These decisions aim to provide relief to US citizens, but may also benefit companies and executives facing charges in US courts, like key executives of the Adani Group who are currently facing bribery charges. According to sources, the new policy could potentially provide relief to Azure Power — which had a contract (a build, operate and transfer deal) with an Adani Group firm for building a solar project that had come under the scanner for alleged bribery allegations — and, by extension, the Adani Group.
Indian Express
an hour ago
- Indian Express
Lower duty on edible oils, nuts; target growth in spice, rice in US deal: Niti Aayog
India should offer concessions on agricultural products from US such as edible oils and nuts where domestic supply gaps exist, and explore duty concessions to boost high-performing exports — including shrimp, fish, spices, rice, tea, coffee, and rubber — in the US market during the Bilateral Trade Agreement (BTA) negotiations, a Niti Aayog working paper has argued. The need for calibrated negotiations on agricultural trade relations between India and the US arises as India has traditionally maintained relatively high tariffs on politically sensitive agricultural sectors to protect farmers, but the US, under President Donald Trump, has been aggressively pushing for greater market access and lower tariffs, posing a challenge for developing countries such as India. The working paper dated May said India can offer some concessions to the US in the 'import of soybean oil' to meet US demands to reduce the trade imbalance, without harming domestic production, as India is the largest importer of edible oil in the world and the US has a huge export surplus of soybean. 'Import soybean seed from US 'We should also explore the option of importing soybean seed and using it for extracting oil in the coastal areas, then selling the oil in the domestic market and exporting the meal, for which there is adequate overseas demand. This will avoid genetically modified (GM) feed entering the Indian market,' the paper, authored by Senior Adviser at NITI Aayog, Raka Saxena, and Member of NITI Aayog, Ramesh Chand, said. 'Similarly, corn may be imported for ethanol blending, and its by-products — like Distiller's Dried Grains with Solubles (DDGS) — can be entirely exported to avoid GM feed in the country. US corn is cheaper and can be used to meet India's biofuel targets without disrupting local food and feed markets,' the paper said. Notably, soybeans and corn are among the US top exports to China, where a trade war may affect agricultural trade between the two countries. According to a Reuters report, US soybean exports may drop 20 per cent and prices could plunge if the United States and China fail to resolve their trade dispute, limiting US soybeans from accessing their largest market. Ease US apple imports 'Indian producers already enjoy supply advantages in commodities like rice and pepper. High tariffs on such products by India, which are regularly exported by the country, can be easily lowered or even removed in the bilateral trade accord. Such tariffs are not relevant for trade with countries like the US,' the paper said. The Niti Aayog paper said India can consider lower tariffs on agricultural commodities where either domestic production is small or imports do not compete with domestic production due to different quality grades and seasons. 'For example, US apples sell at a premium price in Indian retail markets due to different quality, long shelf life, and off-season availability.' Boost exports of fish, spices & coffee 'India should negotiate more access to the US market for high-performing exports like shrimp, fish, spices, rice, tea, coffee, and rubber. India earns approximately $5.75 billion annually from agri-exports to the US. Expanding this through duty waivers or TRQs should be part of trade talks,' the paper said. The authors said that US is expected to remain a big market for export of surplus food from India and all efforts need to be made to keep favorable environment for export to US. 'This should include strategic opening for US imports into India to achieve larger gains in exports. The ongoing negotiations between the two countries for a bilateral trade accord seem to be the best option for resetting long term trade relationships'. 'Export basket should emphasize both, traditional products like fishery and rice sold in large volume and a large number of high value products, differentiated products, ethnic products, attribute-based products, health foods, processed food etc. which are individually small but cumulatively quite large,' the paper said. In the last 10 years, India's agricultural exports to the US grew nearly fivefold, from $1.18 billion to $5.75 billion and the share of the US in India's total agricultural exports saw a slight decline, dropping from 11.5 per cent in 2004 to 9.8 per cent in 2024. Meanwhile, India's agricultural imports from the US increased even faster, rising from $291 million in 2004 to $2,217.9 million in 2024. Ravi Dutta Mishra is a Principal Correspondent with The Indian Express, covering policy issues related to trade, commerce, and banking. He has over five years of experience and has previously worked with Mint, CNBC-TV18, and other news outlets. ... Read More
Indian Express
an hour ago
- Indian Express
US dismisses India's steel tariff challenge at WTO on legal, procedural grounds
The United States has rejected India's notice at the World Trade Organization (WTO), which proposed retaliatory action against the 25 per cent US tariffs on steel and aluminium, arguing that the tariffs were imposed on national security grounds. The US also pointed out procedural errors in India's case. In its note dated May 23, the US stated that India is wrongly treating the tariffs on steel and aluminium as safeguard measures. It clarified that these duties were imposed under US law (Section 232), which allows such action if imports are considered a threat to national security. This development is significant as US President Donald Trump on Friday announced a move to double import tariffs on steel to 50 per cent — a step Indian exporters have called 'unfortunate', warning that they have already lost $5 billion in exports due to earlier tariffs, and further hikes could deepen losses. 'The United States will not discuss the Section 232 tariffs under the Agreement on Safeguards as we do not view the tariffs as a safeguard measure,' the US told the WTO Council for Trade in Goods in response to India's challenge. In FY2025, India exported $4.56 billion worth of iron, steel, and aluminium products to the US, including $587.5 million in iron and steel, $3.1 billion in articles of iron or steel, and $860 million in aluminium and related goods. These exports now face sharply higher US tariffs, threatening the profitability of Indian producers and exporters. The US also claimed that India had committed procedural errors. 'India never acknowledged the United States' offer to discuss these tariffs in our response dated 16 April 2025. Accordingly, India has not complied with the obligations under the Agreement on Safeguards, the agreement that it mistakenly contends applies to the tariffs in question,' the US note said. Ajay Srivastava, former trade officer and head of the Global Trade Research Initiative (GTRI), said India now has several options. One is to launch a formal WTO dispute, not under the Safeguards Agreement, but under broader GATT rules, challenging the Section 232 tariffs as disguised protectionist measures. 'India could argue that the US is abusing the national security exception, referring to earlier WTO rulings that limit how Article XXI can be invoked. However, this legal path carries risks, as the US has a track record of disregarding WTO rulings on national security,' GTRI said. A more forceful approach would be for India to impose retaliatory tariffs on its own, even without WTO authorisation, Srivastava said. He noted that other countries such as the EU, Canada, and China have already done this in response to the US Section 232 tariffs, as a political signal of resistance. 'While this sends a clear message, it also risks US countermeasures and potential legal battles. GTRI believes that although India has legal and diplomatic options, it may decide not to act immediately,' Srivastava said. GTRI suggested that a pragmatic path would be for India to use the ongoing bilateral Free Trade Agreement (FTA) negotiations with the US as the main platform to resolve the issue. Ravi Dutta Mishra is a Principal Correspondent with The Indian Express, covering policy issues related to trade, commerce, and banking. He has over five years of experience and has previously worked with Mint, CNBC-TV18, and other news outlets. ... Read More
