Gold Breaks $5,200, Trump's Tariff Defeat Shakes Markets
Gold prices strengthened after posting three consecutive weeks of gains, driven by increasing uncertainty over US trade policy, which has shaken market sentiment and pressured the dollar. This has prompted investors to seek defensive assets, while a weaker dollar has increased gold's appeal to global buyers.
In recent trading, gold bullion rose as much as 2.2% to reach $5,200 per ounce. The rally occurred after US President Donald Trump announced he would implement a 15% global tariff, following a Supreme Court ruling rejecting his use of emergency powers to impose duties. The weakening dollar has made gold more affordable for many buyers outside the US.
This court ruling is also considered to have the potential to impact the US fiscal deficit as tariff revenues are threatened with reduced revenue, while also impacting the trade balance. Meanwhile, the 15% tariff announced by the White House is positioned as a replacement for the tariffs invalidated by the court, but its validity is said to be limited—a maximum of 150 days—and can only be used under certain conditions.
The recent gold rally has helped prices recover after a sharp correction at the beginning of the month. The strengthening remains supported by long-term factors such as escalating geopolitical tensions and investor caution regarding government bonds and major currencies. However, analysts warn that volatility remains high in the short term due to the fluctuating direction of US tariff policy and the unstable situation in Iran.
The impact of the Supreme Court ruling has also cast doubt on several US trade deals with key partners. The European Union is reportedly ready to freeze the ratification process with Washington until further clarity is provided. India postponed a planned trip to the US, while Japanese politicians called the situation "a complete mess," adding to the uncertainty that continues to weigh on the market.
In terms of market positioning, gold's strengthening occurred when net long positions in gold futures contracts fell to their lowest level in almost a year, signaling that there is still room to add positions if defensive sentiment persists. At 3:04 p.m. New York time, gold rose 2.2% to $5,221.78/ounce. The Bloomberg Dollar Index fell 0.09%. Silver jumped 3.8% to $87.80, platinum edged lower, while palladium gained.
Source : Newsmaker.id
