Economic summary early morning May 30: US GDP in the first quarter of 2025 decreased slightly more than forecast, gold recovered thanks to a 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) rebounded 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 gains from earlier in the day. A weaker dollar makes gold more attractive to international investors, which has supported precious metal prices.

A New York court ruled on 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 still reacted positively to expectations of reduced risks from tax policy. This caused the yield on the 10-year US Treasury bond to surge above 4.53% while the USD lost momentum on concerns about policy inconsistency.

US businesses are starting to reconsider their domestic investment and production plans, as import tariffs are no longer the “new normal.” Some analysts warn that businesses may delay hiring, capital spending or wage increases, directly affecting consumer growth and profits.

US GDP in the first quarter of 2025 will 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, suggesting a slowdown in purchasing power, albeit 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 (excluding food and energy) even increased 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 new Americans filing for unemployment benefits last week far exceeded economists' forecasts.

The number of new claims for unemployment benefits rose to 240,000 in the week ended May 24, much higher than the 230,000 expected by analysts, according to the US Department of Labor. The previous week, the figure was 226,000 and there was no further adjustment.

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

The number of people continuing to receive unemployment benefits also increased slightly to 1.919 million in the week ending May 17, higher than 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.