FX.co ★ Gold Cuts Losses After Weak US Data

Gold managed to recover some of its earlier losses but still ended up 0.7% lower, hovering around the $3,290 mark. This decline came on the heels of an unexpectedly weak U.S. gross domestic product (GDP) report for the first quarter, which rekindled fears of an impending recession in the United States amid ongoing trade tensions. The U.S. economy shrank by 0.3% from January to March, contrary to predictions of a 0.3% expansion. This contraction was primarily driven by an over 40% increase in imports, as consumers and businesses rushed to secure goods before anticipated tariff hikes from the Trump administration took effect. On a separate note, the ADP National Employment Report indicated that private sector payrolls increased by only 62,000 in April, falling short of the projected 115,000 and marking the lowest gain since July 2024. Despite today's drop, gold remains on course for a fourth consecutive monthly increase, soaring over 6%, as it has continuously reached record highs in recent weeks. This is largely due to heightened concerns over global trade disruptions and growing indicators of economic stress within the U.S.