Gold, traditionally considered one of the safest investments during times of economic uncertainty and geopolitical tension, has taken a sharp downturn both in global and domestic markets. This latest slump is driven by a series of market-calming statements from U.S. President Donald Trump, combined with economic indicators pointing toward renewed investor confidence in riskier assets.
As of Friday morning in the Asian trading session, gold prices fell to $3,235 per ounce, the lowest recorded in the past two weeks. This sudden shift is tied closely to Trump’s announcement that the United States is progressing in trade negotiations with India, Japan, and South Korea, and that talks with China regarding a steep 145% tariff are underway. These developments, while easing global trade tensions, have eroded the appeal of gold, which typically thrives during times of uncertainty.
Simultaneously, a stronger U.S. dollar, an anticipated U.S. jobs report, and speculation over the Federal Reserve’s next interest rate move have put additional pressure on gold prices globally. In Bangladesh, the ripple effects have also been felt. The Bangladesh Jewelers Association (BAJUS) announced a downward revision in gold prices, citing a drop in international prices.
This article examines the interplay of global economic developments, the domestic gold market’s response, expert insights, and what lies ahead for investors amid the shifting financial landscape.
I. The Global Trigger: Trump’s Trade Announcements Calm the Market: Gold’s downturn began with President Trump’s public statement regarding the United States’ trade relations with major Asian economies. During a press briefing earlier this week, Trump revealed that Washington is making “substantial progress” toward signing trade deals with India, Japan, and South Korea-three of its most crucial partners in the Indo-Pacific region.
Additionally, reports from Chinese state media have confirmed that preliminary trade dialogues have resumed with the U.S. concerning the punitive 145% tariff imposed on certain categories of goods. These updates have calmed previously tense relations between the world’s largest economies.
For months, concerns over tariffs, retaliatory sanctions, and protectionist policies had driven up gold demand. Investors flocked to the yellow metal amid the volatility. Now, however, with a more optimistic tone dominating global trade, gold’s appeal as a haven asset is waning. “Markets are breathing easier,” noted Giovanni Staunovo, a commodities analyst at UBS, in a report. “The perceived reduction in geopolitical risk, particularly trade-related, is prompting investors to rotate out of gold and into equities and other high-yield instruments.”
II. Gold vs. the Dollar: A Familiar Dance: Another critical factor pushing gold prices downward is the recent strengthening of the U.S. dollar. As gold is priced in dollars, any appreciation in the dollar’s value makes gold more expensive for holders of other currencies, leading to decreased demand. The dollar index, which measures the greenback against a basket of major global currencies, saw a modest gain this week. Analysts attribute this to early expectations of a solid U.S. non-farm payroll (NFP) report for April and a rebound in U.S. Treasury yields. “Gold is inversely related to the dollar and real interest rates. Both are currently moving in directions unfavorable to gold,” added Staunovo.
III. Waiting on the April Jobs Report: While the market has digested the Trump announcements, investors are now keenly awaiting the April U.S. jobs report, scheduled to be released on Friday, May 2. This report, published by the Bureau of Labor Statistics, will offer deeper insights into the health of the U.S. labor market and the broader economy.
Analysts warn that a weaker-than-expected report could quickly reverse the downward momentum in gold prices. A poor showing would raise doubts about the U.S. economy’s resilience, trigger a drop in the dollar, and potentially prompt the Federal Reserve to revisit its current stance on interest rates.
“The jobs report is crucial,” said Hannah Smith, an economist with Capital Economics. “If unemployment rises or wage growth slows, markets could begin pricing in a rate cut. That would make gold attractive again.”
Earlier in the week, the U.S. GDP figure for Q1 came in lower than expected, reinforcing the view that the American economy may be losing momentum. While not disastrous, the GDP miss has injected a dose of uncertainty into the markets, amplifying the significance of Friday’s job numbers.
IV. Interest Rate Outlook: Is a Fed Rate Cut on the Horizon: The prospect of the U.S. Federal Reserve easing monetary policy has been another key variable influencing gold prices. When interest rates are low, gold becomes more attractive because it does not yield interest or dividends, and the opportunity cost of holding it is lower.
While recent Fed communications have signaled a “wait-and-see” approach, some analysts believe the central bank might consider cutting rates if economic data deteriorates further.
“If the April labor report comes in soft and inflation remains below target, we expect the Fed to cut rates as early as June,” said Robert Dent, U.S. economist at Nomura Securities. “Such a move would be bullish for gold.” However, for now, the combination of easing geopolitical risk and neutral Fed messaging has helped keep investor anxiety at bay.
V. Domestic Reaction: Gold Prices Dip in Bangladesh: The global price trend has echoed in the domestic market, with the Bangladesh Jewelers Association (BAJUS) adjusting gold prices downward across all purity categories.
In a press release issued on Saturday, May 3, BAJUS announced a reduction in the price of 22-carat gold by Tk 3,569 per bhori, setting the new rate at Tk 168,976 per bhori. The price cut will come into effect nationwide from Sunday, May 4.
Other categories also saw reductions: 21-carat gold: Tk 161,301 per bhori, 18-carat gold: Tk 138,253 per bhori, Traditional gold: Tk 114,296 per bhori. The price of silver, however, remains unchanged. The updated rates for various silver categories are:
22-carat silver: Tk 2,846 per bhori:21-carat silver: Tk 2,718 per bhori, 18-carat silver: Tk 2,333 per bhori, Traditional silver: Tk 1,750 per bhori.
According to BAJUS, the decision to revise gold prices was made in alignment with the drop in international gold prices and based on ongoing trends in global bullion markets. “This adjustment reflects the international market conditions,” said Masudur Rahman, a member of the BAJUS Pricing Committee. “We believe it’s essential to ensure that our pricing structure is transparent and competitive.”
VI. Investor Sentiment: A Shift in Strategy: The gold market’s decline also marks a broader shift in investor behavior. For the past two years, amid pandemics, wars, and trade wars, investors leaned heavily on gold as a hedge against inflation and instability. However, the recent transition to riskier assets indicates growing confidence in economic stability-at least in the short term.
Stock markets in Asia and Europe rallied following Trump’s remarks. Key indices such as Nikkei 225, Hang Seng, and FTSE 100 saw modest gains. Commodity markets also saw increased activity, with industrial metals and oil registering small gains as well. This rotation out of gold is often viewed as a bullish sign for the broader economy. However, analysts warn that the shift could be short-lived.
“Sentiment is volatile,” said Tanvir Ahmed, a Dhaka-based market analyst. “The markets are quick to price in optimism, but any negative news-whether it’s from the Fed, Ukraine, or a resurgence in inflation-could push investors right back to gold.”
VII. Outlook: What’s Next for Gold Prices: The trajectory of gold prices in the coming weeks will largely depend on macroeconomic data, central bank actions, and the geopolitical environment. While recent developments have dented gold’s allure, many analysts believe that its long-term fundamentals remain strong.
“The gold bull cycle is not over,” argues James Steel, Chief Precious Metals Analyst at HSBC. “We may see further consolidation in the short term, but the structural drivers-such as central bank buying, inflationary pressures, and global political fragmentation-remain supportive.” Central banks, especially in developing economies, continue to add gold to their reserves, reflecting broader concerns about currency stability and reserve diversification.
In Bangladesh, experts also expect domestic demand for gold to rebound in the coming months due to wedding season, festive purchases, and investment-driven buying. Gold’s sharp fall, triggered by Trump’s conciliatory trade messaging and a buoyant dollar, has stirred global and domestic markets alike. While this drop may seem like a blow to traditional safe-haven investors, it reflects broader optimism about economic stability and a shift toward riskier, higher-yielding assets.
However, the situation remains fluid. Key economic indicators like the U.S. jobs report, interest rate decisions, and evolving global trade dynamics will ultimately dictate whether gold continues to slide-or makes a swift comeback. For now, both investors and consumers in Bangladesh and beyond are adjusting their strategies, watching closely as one of the world’s oldest and most resilient assets navigates a rapidly changing economic terrain.
