Gold Hits Three-Week High, US Tariffs & Iran Tensions Boost Safe Haven
Gold prices (XAU/USD) surged to a three-week high on Monday (February 23rd), driven by a weakening US dollar and increased demand for safe haven assets amid uncertainty over US trade policy and escalating US-Iran tensions. In recent trading, gold was trading around $5,150/ounce, up nearly 1% in a single day.
The primary trigger came from the US Supreme Court's decision to limit the use of the International Economic Economic Partnership (IEEPA) to impose broad-based "reciprocal" tariffs. Following the ruling, the White House invoked Section 122 of the Trade Act of 1974 to impose a temporary flat tariff on imports, effective February 24th and in effect for 150 days. Trump subsequently raised the tariff to 15%.
This change in the legal pathway for tariffs added to global trade uncertainty and raised questions about the policy's credibility and fiscal impact (including the issue of the halt in collection of IEEPA tariffs by customs authorities). The combination of "rapidly changing rules" and technical uncertainty led investors to reduce exposure to US assets and increase their hedging efforts through gold.
On the geopolitical front, the market is also monitoring the US-Iran standoff. Nuclear talks are scheduled to resume in Geneva on Thursday, and any headlines regarding the potential for a deal or the risk of escalation could immediately move the market—keeping the geopolitical risk premium high and supporting gold.
With a relatively light US data calendar, gold's movement this week is likely to be sensitive to tariff developments, the direction of the dollar, and Middle East news. However, more broadly, expectations that US interest rates could still fall this year remain a supporting factor for gold in the medium term, although short-term volatility is expected to remain high.
Source: Newsmaker.id
