Gold Holds Higher, Trump & Iran Tariffs a Trigger
Gold prices (XAU/USD) held in the green zone in the first half of the European session on Thursday (February 26th). Although gains were limited, the market bias remained positive as safe-haven demand continued to decline.
Meanwhile, market participants are now awaiting more convincing confirmation of the strengthening—especially if prices can sustain and be accepted above the $5,200 area—before taking new, more aggressive positions.
The main support comes from uncertainty over US trade policy. After the Supreme Court blocked many of President Donald Trump's extensive import tax schemes, the White House invoked Section 122 of the Tariff Act of 1974 to impose an additional 10% tariff. Trump later suggested the tariff could be increased to 15%, while a White House official indicated the administration is still working on an increase to that level. The uncertainty over the duration and the frequently changing policy direction has kept investors on the defensive—and gold has once again benefited.
Geopolitically, the market is also preparing for the third round of US-Iran talks regarding the nuclear dispute. These negotiations are taking place amidst the growing risk of escalation, following a significant US military buildup in the Middle East. In his State of the Union address on Tuesday, Trump reiterated his tough stance on Iran and stated that he would not allow Iran to acquire nuclear weapons—a statement that has kept the risk premium high.
An additional factor strengthening gold is the moderate weakening of the US dollar. Although the Federal Reserve remains hawkish, the market is still pricing in the possibility of three 25 bps interest rate cuts. At the same time, concerns about retaliatory tariffs and potential disruptions to global supply chains have kept USD buying momentum subdued.
The combination of tariff uncertainty, geopolitical tensions ahead of the US-Iran dialogue, and a weak USD are keeping gold supported. However, the market believes the continuation of the rally will be largely determined by the price's ability to break through and sustain above $5,200, as this area is still seen as the next validation point to open up room for further upside in the near term.
Source: Newsmaker.id
