Gold News: Iran Tensions and Supreme Court Tariff Ruling Spark Gold Rally Momentum

Spot Gold Rallies Friday on Iran Tensions, Tariff Chaos and Safe-Haven Demand

Spot gold rose on Friday. The market was impacted by numerous factors throughout the session. Traders focused on the bullish indicators and tended to downplay the bearish.

On Friday, XAUUSD settled at $5108.26, up $111.77 or +2.24%.

U.S.-Iran Nuclear Standoff Remains the Primary Driver of the Rally

In my opinion, the primary driver of the rally was the U.S.-Iran nuclear standoff. It had been underpinning prices most of the week. With the U.S. sending another warship fleet and giving Iran a 10-to-15-day advanced warning of attack, the situation escalated, reinforcing gold as a safe-haven asset.

Supreme Court Tariff Ruling Knocks the Dollar, Sending Gold Higher

The second most influential factor was the U.S. Supreme Court ruling that struck down President Trump’s broad tariff powers. The news drove down the U.S. Dollar, which had been edging higher at the time, making gold more attractive to foreign buyers. Later in the trading session, prices rose further as traders reacted to Trump’s announcement of fresh global tariffs.

The Supreme Court first declared illegal Trump’s use of the International Emergency Economic Powers Act to impose global tariffs. He then said he would impose a 10% global tariff for 150 days to replace some of his emergency duties that the Court struck down. Both moves were read as bullish by traders.

Weak GDP and Sticky PCE Trim June Rate Cut Odds but Fail to Derail the Rally

Gold traders showed little reaction to mixed U.S. economic news that dampened the chances of a Fed rate cut in June. U.S. GDP was weaker than expected and PCE inflation came in as expected but still above the 2% mandate. According to the CME FedWatch Tool, this drove the chances of a June rate cut lower from 50.2% on Thursday to 45.6% at Friday’s close.

The economic data drove the dollar higher, so gold’s gains may have been limited at the time, but the dollar turned lower and gold gained further once the tariff news came out at around 14:30 GMT.

Technical Outlook: $5108 High Puts Gold Just Under Key Resistance at $5119 and $5143

Technically, gold’s high on Friday at $5108.72 put the market just under the February 11 top at $5119.35 and short-term 61.8% resistance at $5143.89. If the upside momentum continues into Monday, XAUUSD could break out to the upside. Supporting the market is a 50% level at $5002.31.

A Nuclear Deal Could Erase the Week’s Gains and Shift Focus Back to the Fed

If geopolitics is the main driver of the rally, then gold speculators are at risk of a nuclear deal between the United States and Iran being struck before Trump’s 10-to-15-day window closes. This could erase all of this week’s safe-haven gains and drive prices back toward this week’s low at $4842.60 and perhaps the 50-day moving average at $4706.73.

If that scenario plays out, it will also cause traders to shift their focus back to the economy and the chances of a Fed rate cut.

More Information in our Economic Calendar.