Gold Makes 1st Monthly Loss of 2025 as Trump Re-Ignites China Trade War
Friday, 5/30/2025 15:56
The PRICE of GOLD erased an earlier rally on Friday, ending May with its first month-on-month drop of 2025 amid mixed inflation data worldwide plus US President Trump re-igniting his trade war with Beijing as US-China military tensions worsen.
Following his
'Liberation Day' tariffs starting in early April − now back in place as the White House appeals
this week's court ruling banned them − "Many [Chinese] factories closed and there was, to put it mildly, 'civil unrest'," Trump claimed on his TruthSocial platform.
"I didn't like it, for them, not for us. I made a FAST DEAL...[but] the bad news is that China, perhaps not surprisingly to some, HAS TOTALLY VIOLATED ITS AGREEMENT WITH US," the President went on, without giving any details.
Trump's White House is also boosting weapons sales to Taiwan − seen by Beijing's Communist Government as a 'breakaway' province − with US officials telling Reuters that
shipments could "easily exceed" the quantities sent during his 2017-2021 term in office, ending what analysts had seen as a move towards "strategic ambiguity" in Washington's military commitment to defending the island.
Dropping 2.1% from last Friday's record high week-end in London, the Dollar price of gold fixed around $3272 per Troy ounce at the City's 3pm benchmarking auction.
Silver's midday auction had earlier found the more industrially useful precious metal at $33.04 per Troy ounce, some 4.0% below end-March's 12.5-year high.
New inflation data today said that the cost of living in Tokyo, the world's largest city, rose to 3.6% per annum this month on the 'core' measure, the highest in 2 years.
Consumer price inflation in world No.3 economy Germany slowed a little less than analysts forecast, reading 2.1% per year on Destatis' first estimate of the HICP measure.
US inflation also came in a little softer than expected for April, with the core PCE measure − the preferred gauge for US central bank the Federal Reserve − slowing to 2.5%, the weakest in more than 4 years but still 0.5 percentage points above the Fed's medium-term target.
With trade talks between Washington and Beijing "a bit stalled" according to Trump's Treasury Secretary Scott Bessent overnight, Chinese tech stocks fell Friday, cutting May's gain for the broader CSI300 index down to 1.9%.
That's only the 10th monthly gain of the past 2 years.
A dip in New York equities then cut the S&P500's gain for May to 6.0%, its first monthly price rise since Trump returned to the White House in January.
Gold meanwhile dropped 0.9% across May, its first monthly loss since December.
Gold hasn't fallen for more than 2 months in a row since October 2022. That 30-month stretch is the longest since gold's record 143-month period starting summer 2000 and ending almost 12 years later.
With the US arms trade to Taiwan set to grow meantime, military spending among other south-east Asian nations has
jumped by more than 1/3rd since 2022 according to new intelligence published today ahead of this weekend's annual Shangri-La Dialogue defense meeting in Singapore, spurred by the conflicts in Ukraine and Middle East plus "worsening" US-China relations and Beijing's increasing belligerence in the South China Sea.
Provoking more than 500 diplomatic protests by the Philippines, China's naval activity in the region has also angered Malaysia and Vietnam, with its long-range H-6 bombers being seen this week on Woody Island in the Paracels for the first time since 2020.
Senior military officials from the United Arab Emirates − "an influential [and] key partner" of the US according to the Department of State − this week visited Beijing to discuss issues thought to include a possible purchase of China's Chengdu J-20 stealth fighter jet.
Joint exercises between the UAE Air Force and China's PLA Air Force began raising espionage concerns in Washington last summer.
This week's visit follows
Washington's refusal to supply the UAE with F-35 fighters, apparently due to wanting Israel to retain miliary superiority in the Middle East region, and despite the US keeping 3,500 troops stationed in the Emirates.
In contrast to gold,
the price of silver bullion in London rose across the month of May, reversing more than half of April's steep drop to show a 2.5% gain as the initial economic and financial-markets panic at Trump's trade tariffs receded.
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