Economic summary early morning of May 30: US GDP in the first quarter of 2025 decreased slightly more than expected, gold recovered thanks to the weakening USD

Gold prices recover strongly thanks to weak USD

In the trading session last night, May 29, early morning of May 30, Vietnam time, the price of gold (XAU/USD) bounced back strongly, reaching nearly 3,320 USD/ounce after hitting a low of 3,245 USD during the day. This recovery occurred when the USD weakened after the US federal court's ruling on President Donald Trump's tariff policy.

The US dollar index (DXY) fell to near 99.50, reversing earlier gains. A weaker dollar makes gold more attractive to international investors, which has supported the price of the precious metal.

A New York court ruled Tuesday that Trump exceeded the limits of the International Emergency Economic Powers Act (IEEPA) by imposing tariffs on a wide range of trading partners. The court ordered the government to lift the tariffs within 10 days, but the White House quickly appealed.

Trump has previously announced retaliatory tariffs on all trading partners, specifically targeting Canada, Mexico and China for border and fentanyl-related reasons. However, other legally-based tariffs such as those on aluminum, steel, autos and semiconductors remain in place.

White House economic adviser Kevin Hassett expressed confidence that the ruling would be overturned. However, financial markets reacted positively to expectations of reduced tax policy risks. This sent the yield on the 10-year US Treasury note soaring above 4.53%, while the US dollar lost momentum on concerns about policy inconsistency.

American businesses are starting to rethink their domestic investment and manufacturing plans, as import tariffs are no longer the “new normal.” Some analysts warn that businesses may delay hiring, capital spending or wage increases, which could hurt consumer growth and profits.

US GDP in Q1/2025 to decrease slightly

According to the US Bureau of Economic Analysis (BEA), the country's GDP in the first quarter of 2025 decreased by 0.1% compared to the initial forecast of 0.3%. Although it has been adjusted more positively, this is still a negative figure, showing that the economy has not really recovered.

The main reason for this decline is the trade deficit, when imports increased sharply while government spending decreased. Some other factors such as investment, exports and consumer spending increased slightly but not enough to compensate.

Despite the better-than-expected GDP revision, many economic indicators remain worrying. Consumer spending rose just 1.2%, down from the 1.8% previously reported. That suggests a slowdown in purchasing power, though not a drastic one.

Another issue is that inflation remains high. The GDP price index remains at 3.7%, while the personal consumption expenditures (PCE) index shows no signs of cooling. Core inflation (which excludes food and energy) even rose slightly from 3.4% to 3.5%.

The number of people filing for unemployment benefits this week far exceeded forecasts

The US released weaker-than-expected labor market data. The number of Americans filing new claims for unemployment benefits last week far exceeded economists' forecasts.

New claims for unemployment benefits rose to 240,000 in the week ending May 24, well above the 230,000 expected by analysts, according to the Labor Department. The previous week, the figure was 226,000 and there was no further adjustment.

The four-week average of jobless claims was 230,750, below the forecast of 233,000. The previous week, the figure was revised to 231,000.

The number of people continuing to receive unemployment benefits also rose slightly to 1.919 million in the week ending May 17, above the expected 1.900 million and higher than the previous week (1.893 million after adjustment).

These figures show that the US labor market is showing signs of slowing, causing many investors to worry about the economic outlook.