Matthew Bolden

Fri, May 23, 2025, 12:57 PM4 min read

Happy Friday, traders. Welcome to our weekly market wrap, where we take a look back at these last five trading days with a focus on the market news, economic data, and headlines that had the most impact on gold prices and other key correlated assets— and may continue to in the future.

Here’s what you need to know:

1. Gold surged more than 5% this week, ending near $3350/oz, driven by political and fiscal instability in the US.

2. The House budget bill and Trump’s new 50% EU tariff threats rattled markets, weighing heavily on the US Dollar.

3. Safe-haven flows into gold accelerated after credit rating concerns and equity market turbulence.

4. Next week’s focus: further fallout from fiscal policy chaos and potential weekend volatility spillover.

Whether we talk about gold, specifically, or markets in general, there are two main veins of policy enacted by the United States and others that play a key part in the economic function of each state and/or the global financial system: monetary policy and fiscal policy. To oversimplify: Monetary is primarily controlled or enacted by central banks like the Fed and affects the supply of money and the availability of credit, often via manipulation of key interest rates. Fiscal policy is how governments do (or do not) spend that cash or credit, injecting it into the national/global economy.

Both inputs were critical at home and abroad during the COVID-19 pandemic. But since economies began to rebound from that crisis and had to fend off the next one threatened by inflation, it's been the pulling of monetary levers that investors and traders in gold and other assets have most focused on. In gold, dovish monetary policy (loosening of financial conditions, lowering interest rates) typically drives a rising tide; hawkish monetary policy (the inverse) typically drives spot prices towards the trough. Early 2025 and the escalation of the Trump Trade war, however, has pushed fiscal policy back into play because of the probability that crippling damage to US trade relations has the potential to leave ugly marks on the US federal budget (the keystone of fiscal policy) and balances.

This week, the macroeconomic data calendar was very light, but several key Fed officials were scheduled to make public remarks just days after a major rating agency downgraded the credit-worthiness of US debt (a finding that has serious possible implications for both monetary and fiscal policy-making), so we had anticipated more trading based on reading the monetary-policy tea leaves.