Gold extended its gains for a fourth consecutive session supported by renewed trade tensions following the US administration’s announcement of new global tariffs alongside economic data that strengthened demand for defensive assets. Price action clearly reflects portfolio repositioning as trade and geopolitical uncertainty intensifies.
Spot gold traded near 5143 dollars per ounce up around 0.8 percent while futures climbed toward 5166 dollars posting relatively stronger gains indicating expanded hedging activity in the futures market. The metal had already finished last week more than 1 percent higher as tensions between Washington and Tehran escalated prompting markets to reprice geopolitical risk premiums.
Regarding the US dollar it eased toward 97.4 points yet maintained a weekly gain close to 1 percent. The court ruling issued by a clear majority stated that the administration had exceeded its authority under emergency economic powers legislation. The White House responded by signaling that tariffs would remain in place under alternative legal frameworks introducing a new 10 percent levy before raising it to 15 percent keeping uncertainty elevated across markets.
The decision to impose a 10 percent tariff for 150 days under Section 122 of US trade law and subsequently increase it to the legal ceiling of 15 percent followed the Supreme Court’s rejection of a broader previous framework. These developments raised the likelihood of retaliatory measures and revived concerns about supply chain disruptions weighing on risk appetite and directing capital flows toward gold and US Treasuries.
On the data front the US economy expanded at an annualized rate of 1.4 percent in the fourth quarter signaling a notable slowdown from the prior period. Meanwhile the Personal Consumption Expenditures index the Federal Reserve’s preferred inflation gauge rose 2.9 percent year on year with the core measure near 3 percent remaining above the 2 percent target. The contrast between relatively elevated inflation and weaker growth places the Federal Reserve in a delicate position limiting expectations for rapid rate cuts and offering structural support to the dollar during the week.
A report from BCA Research suggests that US trade tensions are likely to remain relatively contained through 2026 with the potential for renewed escalation in 2027 as the political landscape shifts. Legal constraints and election related pressures currently limit the administration’s ability to implement broad tariff increases.
Recent judicial decisions especially the Supreme Court’s restriction on the use of emergency powers for sweeping tariffs reinforced Congress’s authority over trade policy narrowing the White House’s room for maneuver. The firm expects policymakers to rely on narrower and temporary tools within existing legal frameworks which may lift the effective tariff rate modestly before legislative hurdles curb further expansion.
However the report argues that the more immediate market risk stems from geopolitical developments particularly the Iran file and potential oil supply disruptions. BCA estimates roughly a 38 percent probability of a major oil shock a scenario capable of repricing energy markets increasing volatility and directly affecting inflation and growth expectations.
Tensions between Washington and Tehran have intensified following stalled nuclear negotiations and an expanded US military presence in the Gulf alongside warnings of possible limited strikes. These dynamics have kept oil prices highly sensitive to field developments making the energy market the primary focal point for investors.
The combination of slowing growth and persistent inflationary pressure raises the prospect of a stagflation environment historically supportive for gold. Holding above recent support levels strengthens the case for continued upward momentum especially as political and trade risks continue to weigh on global market sentiment.
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