Gold Drops Below $3,300 as Trade Tensions with China Return
Gold’s price downtrend resumed on Friday, with the yellow metal falling 0.83% daily. XAU/USD traded at $3,289 after dropping below the $3,300 level. The decline was triggered by a strengthening US Dollar and renewed trade tensions between the US and China.
Despite April’s Core PCE inflation cooling slightly, stronger-than-expected US economic data pushed Treasury yields higher, reducing gold’s appeal as a safe haven asset.
Trump Reignites Trade Tensions with China
On the geopolitical front, former President Donald Trump reignited trade tensions by accusing China of completely violating their trade agreement, stating, “China… HAS TOTALLY VIOLATED ITS AGREEMENT WITH US.” His comments weighed on market sentiment, leading to a decline in US equities and a rebound in the US Dollar Index (DXY).
Additionally, a US Federal Appeals Court reinstated most of Trump’s previously blocked tariffs, further fueling trade-related uncertainty.
Impact on US Debt and Treasury Yields
Although inflation data came in line with expectations, stronger US economic performance lifted Treasury yields, diminishing demand for safe havens like gold.
The US Dollar remained firm near 99.50 amid ongoing trade tariff speculation. Weekly jobless claims rose to 240K, above expectations, signaling labor market softness. Meanwhile, reports suggest the Trump administration is considering tariffs of up to 15% for 150 days.
Money markets now price in nearly 49 basis points of Fed rate cuts by year-end. Traders await PCE data, consumer sentiment, and Chicago PMI figures for more guidance on monetary policy.
Cryptocurrency Market Reacts to Tariff Threats
Bitcoin Dips Below $105K as Trump’s China Tariff Rhetoric Reignites Market Fears
Bitcoin fell below $105,000 for the first time since May 20, dropping 1% on the day and over 3.7% weekly. The decline followed Trump’s accusation that China violated its trade agreement, which reignited tariff fears. Despite stable PCE data at 2.5% YoY, markets turned risk-averse.
Ethereum, XRP, and Solana also posted sharp losses, while meme coins and AI-related tokens saw double-digit drops. The renewed geopolitical uncertainty spooked crypto investors, leading to broad-based declines across the digital asset market.
Ethereum Posts First Monthly Gain of 2025 as Whales and ETF Inflows Drive 46% Rally
Ethereum (ETH) closed May with a strong 46% monthly gain — its first positive return in 2025 — fueled by whale accumulation and record-breaking inflows into US spot Ethereum ETFs. Whales added 1.12 million ETH in May, while ETFs saw $493 million in net inflows.
Despite this bullish backdrop, ETH slipped 2.6% on Friday to around $2,578, facing technical rejection at $2,750 and breaking below ascending triangle support. Futures liquidations totaled $117 million, and open interest surged by 43% to $17.5 billion. However, Binance data shows short positions now outweigh longs, suggesting possible whale hedging or growing bearish bets amid macro uncertainty.
Trump Media Raises $2.44B to Establish Bitcoin Treasury
Trump Media and Technology Group (TMTG), backed by Donald Trump, closed a $2.44 billion private offering to establish a Bitcoin treasury. The deal includes $1.44 billion from common stock sales and $1 billion from convertible notes.
Approximately $2.3 billion of the proceeds will be used to purchase Bitcoin, placing the company among the top public BTC holders. Custodians for the treasury will be Crypto.com and Anchorage Digital. TMTG will add Bitcoin to its balance sheet alongside $759 million in liquid assets.
Hyperliquid Whale Loses Nearly $100M as Bitcoin Crashes Below $105K
Crypto trader James Wynn, known for his high-leverage bets on Hyperliquid, faced nearly $100 million in liquidations after Bitcoin plunged below $105,000 on May 30. Two major long positions totaling 949 BTC were wiped out as BTC hit lows of $104,150.
One day earlier, Wynn also saw a $10M position liquidated at $106,330. Despite these losses, Wynn still holds a massive 40x leveraged long worth $1.25 billion opened at $107,993 — now showing an unrealized $3.4M loss. His cryptic Matrix-themed post on X followed the wipeout, amid market turbulence driven by renewed Trump-China tariff concerns.
Conclusion and Outlook
The past week has been dominated by renewed trade war rhetoric from former President Donald Trump, which has significantly impacted global financial markets. His accusations against China and reinstated tariffs have reignited fears of a broader trade conflict, leading to a “risk-off” sentiment across various asset classes.
The market remains highly sensitive to further statements or actions regarding Trump’s tariff proposals. Traders are closely watching upcoming economic data, including the Fed’s preferred inflation gauge (PCE), consumer sentiment, and Chicago PMI, for signs of potential shifts in monetary policy or market direction.
