Gold News: Gold Rally Intact — Why Iran and the Fed Matter More Than Tariffs

Spot Gold Picks Up a Bid as Dollar Slides on Tariff Uncertainty

Spot Gold picked up a bid on Friday as the U.S. Dollar slid in reaction to the uncertainty centering around U.S. tariffs. According to Reuters, a revived “Sell America” trade may be behind the move, but I think saying this is a little premature since we don’t know all of the details yet and we’re just looking at a reaction to the news.

Supreme Court Ruling and Trump’s Tariff Response Were Telegraphed — Not a Surprise

Some are calling the Supreme Court’s decision to declare President Trump’s tariffs illegal a surprise, but I think the news has been telegraphed for weeks. Trump’s perfectly legal response — the adding of an additional 15% tariff on imports — was also expected. I believe the timing is the surprise, not the action-reaction.

Gold’s Uptrend Remains Intact — January’s Selloff Was a Reset, Not a Reversal

Gold is in an uptrend on the weekly chart and, other than the steep decline a month ago, hasn’t really shown any signs of weakness. In hindsight, the one-week break in January looks like a reset, designed to reestablish trend line support and to shake out the weaker traders that had pushed prices too high for the long-term buyers.

Tariffs Are Creating Uncertainty, but That Alone Isn’t Enough to Drive Gold Higher

Other than creating uncertainty, I fail to see how the news is bullish for gold, other than maybe as a hedge against lower stock prices. The dollar has also weakened since the tariff announcements, which tends to lead to increased foreign demand for gold.

Iran Negotiations Thursday — Just Days Before Trump’s Military Deadline

Geopolitics is also playing a role in the rally, with gold traders eyeing the simmering tensions between the United States and Iran. This week, negotiations will continue on Thursday, just days before the 10-to-15-day window that Trump suggested last week could launch the start of military activity.

Fed Uncertainty Could Cap Gold’s Gains Just as Easily as It Drives Them

If uncertainty is driving gold prices higher, it could also cap gains or even cause them to move lower. I’m talking about the uncertainty surrounding the timing of the first rate cut in 2026. Gold topped at $5602.23 in January the day after the last Fed meeting. This tells me that something the Fed did or said encouraged investors to book profits. The dollar also reached a bottom at that time, so the Fed statement may have been interpreted as hawkish. That same message came across last week with the release of the Fed minutes on Wednesday.

Prior to the tariff news on Friday, the dollar was steady-to-better because news of weaker GDP and higher inflation supported the idea that the Fed didn’t have enough economic data to cut rates in March or June. The March meeting is over a month away and the market is already saying there is a 94% chance the Fed won’t cut rates at that time. The June CME FedWatch Tool sees only a 44% chance of a rate cut in June.

Technical Outlook: $5143.89 Sets the Tone — Above Targets $5600, Below Means Range

This week, the gold market is likely to lean higher with the weekly Fibonacci level at $5143.89 controlling its direction, along with the geopolitical situation in the Middle East and the tariff news. I think the tariff story will eventually fade away, but the geopolitical situation is going to linger. The trigger for volatility will be the outcome of Thursday’s negotiations between the U.S. and Iran. I think the odds are pretty strong that by next weekend, the two countries will either be engaged in a war or both claiming they won the negotiations.

The emphasis will then shift back to the economic data and the chances of a June rate cut. Trader reaction to $5143.89 will set the tone this week. Holding above will put $5600 back on the map, but a break under it will put prices back inside a range.

The Bottom Line: Ignore the Noise and Watch Iran and the Fed

The “Sell America” narrative is premature. The Supreme Court ruling wasn’t a surprise and the tariff story is just noise. The real drivers are Iran geopolitics and the Fed rate cut timeline. Those two factors will ultimately determine where gold goes from here.

More Information in our Economic Calendar.