Gold vaulted to a three-week high on Monday after a dramatic legal setback to President Donald Trump’s tariff regime injected fresh uncertainty into global markets, weakening the dollar and reigniting demand for safe-haven assets. Spot gold rose 1.1% to $5,158.29 an ounce in early trade, after touching its highest level since January 30. U.S. gold futures for April delivery climbed 2% to $5,180.40, underscoring the renewed bullish momentum in bullion.
The catalyst was a landmark ruling by the Supreme Court of the United States, which struck down sweeping tariffs imposed under emergency powers legislation. The decision marked a significant blow to Trump’s trade agenda and immediately reverberated across currency and equity markets. The dollar weakened sharply in Asian trading, while Wall Street futures slipped as investors grappled with the policy vacuum and potential retaliatory measures.
In response to the court’s ruling, Trump signaled he would raise a temporary blanket tariff on U.S. imports from 10% to 15%, amplifying the sense of unpredictability. Rather than calming markets, the announcement reinforced fears of escalating trade tensions and policy instability. This murkiness revived elements of the so-called “sell America” trade, with capital rotating away from U.S. assets and into defensive holdings such as gold.
Gold’s appeal in times of political and economic turbulence remains undiminished. The metal’s latest rally reflects not only legal and trade uncertainty but also broader concerns about geopolitical risk. Investors are closely monitoring U.S.–Iran tensions, as Tehran has signaled willingness to make concessions on its nuclear program in exchange for sanctions relief and recognition of uranium enrichment rights. Any indication of military escalation could provide further upward thrust to bullion, particularly if it coincides with prolonged trade friction.
Market strategists suggest that gold’s ability to challenge resistance near the $5,400 level will depend on how long tariff ambiguity persists and whether geopolitical flashpoints intensify. The current move appears driven less by speculative excess and more by defensive positioning amid layered global risks.
Compounding the uncertainty, recent U.S. inflation data showed underlying price pressures accelerating more than expected in December, with signs of further firming in January. Sticky inflation complicates the policy calculus for the Federal Reserve, reinforcing expectations that interest rate cuts are unlikely before midyear.
Ordinarily, higher-for-longer rate expectations would weigh on non-yielding assets such as gold. However, the current environment illustrates how geopolitical and policy shocks can override conventional macro drivers. The dollar’s weakness following the court ruling has offset the drag from firm inflation data, allowing gold to rally despite a less accommodative rate outlook.
The bullish tone extended to other precious metals, with silver surging 2.9% to $86.98 per ounce, its strongest level in more than two weeks. Platinum edged modestly higher, while palladium slipped slightly, reflecting divergent industrial demand dynamics. Silver’s outsized gain suggests speculative appetite is broadening beyond gold, particularly as investors seek leveraged exposure to safe-haven flows.
The coming sessions will test whether gold’s advance marks the beginning of a renewed leg higher or merely a volatility-driven spike. With legal battles, trade recalibrations, inflation surprises and geopolitical negotiations all unfolding simultaneously, bullion remains at the nexus of global uncertainty — and for now, firmly back in favor.
With information from Reuters.
