I would have expected the Supreme Court decision to be a negative for gold, as it opens the pathway to a reversal of tariffs and a re-affirmation of the dollar-based system.
Instead, the market seems to be taking it as a sign of further turmoil and uncertainty, which is gold bullish. The ongoing worries about a war in Iran are certainly underpinning that belief. Yesterday, Trump said Iran had 10 or “maybe 15” days to make a deal and he later confirmed that there could be a per-emptory strike to force Iran’s hand.
On the seasonal side, the Lunar New Year holidays are traditionally the end of a seasonal period of strength for gold but it hasn’t exactly unfolded that way this year. Gold opened the week lower but it’s steadily climbed back and unless it drops $30 late, it will post the highest ever weekly close and only the second one above $5000/oz.
For the week ahead, the focus is going to be on tariffs and Iran again. We are expecting Trump to re-impose tariffs via Section 122 but the details of that are unclear, including exemptions like USMCA. He said they will be 10% but the authority grants him to impose up to 15%, which I presume he’s holding back in case he needs to retaliate.
As for gold, I wouldn’t celebrate too much about the record high. The key short term level is last week’s high of $5118 and if it can break that, we can start talking about a re-test of the record near $5600.
That said, it’s impressive that gold has held so close to the highs despite ample opportunities and reasons for some meaningful profit taking
