Gold Climbs After Trump’s Tariff Setback Casts Uncertainty on Trade Agreements

Gold Prices Surge Amid US Trade Policy Uncertainty

Gold extended its rally, marking a fourth consecutive week of gains as growing doubts over US trade strategies rattled financial markets and weakened the US dollar.

The precious metal climbed up to 1.4%, nearing $5,180 per ounce. This move followed President Donald Trump's announcement of a new 15% global tariff, intended to maintain trade protections after the Supreme Court blocked his use of emergency powers to set tariffs. The dollar's decline further boosted gold's appeal by making it more affordable for international buyers.

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The Supreme Court's decision has thrown recent US trade agreements into question. In response, the European Parliament’s trade leader suggested postponing the ratification of a deal with Washington until the situation becomes clearer. Indian officials have delayed a planned visit to the US, and a Japanese ruling party member described the developments as “a real mess.”

Gold’s recent upward momentum has helped it recover from a sharp drop earlier in the month, when prices fell from record highs. The rally is supported by ongoing factors such as global political tensions and investor skepticism toward government bonds and currencies.

“There are sufficient long-term drivers supporting gold at this stage,” noted Vasu Menon, a strategist at Oversea-Chinese Banking Corp. “However, after the rapid gains in recent months, expect some price swings in the near term as US trade policy and the situation in Iran continue to evolve.”

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Bloomberg strategists point out that gold’s resilience, despite reduced hedge fund interest, suggests more room for gains. Data from the Commodity Futures Trading Commission reveals that net-long positions in gold futures have dropped to their lowest point in almost a year.

Mark Cranfield, Markets Live strategist

Meanwhile, in the Middle East, market participants are closely monitoring tensions between the US and Iran. Although negotiations are ongoing regarding Iran’s nuclear program, the US has deployed significant military resources to the region, raising fears of potential limited strikes or even broader conflict.

As of 11:02 a.m. in Singapore, gold was up 1.3% at $5,174.75 per ounce. The Bloomberg Dollar Spot Index slipped 0.2%, following a similar decline on Friday. Silver surged 3.4% to $87.53, while platinum and palladium also posted gains.

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