Gold Edges Higher as Fiscal and Geopolitical Risks Build

Key Takeaways:

• Gold has firmed since Friday, supported by dollar softness and rising macro uncertainty.

• The tariff ruling has added fiscal uncertainty, indirectly boosting bullions appeal.

• Middle East tensions and comments from President Donald Trump are sustaining safe-haven demand.

Market Summary:

Gold has edged higher since Friday, supported by a convergence of macro uncertainty, dollar softness, and renewed geopolitical risk premium. The Supreme Court decision invalidating large portions of the U.S. tariff regime acted as an important catalyst, as markets moved to price in potential fiscal strain and prolonged legal uncertainty. Strategists noted that the possible need for tariff refunds and reduced future trade revenue could increase reliance on monetary accommodation over time, a backdrop typically constructive for non-yielding assets like gold.

Safe-haven demand has also been reinforced by escalating geopolitical tensions in the Middle East. President Trump indicated the U.S. is weighing a limited strike to pressure Iran into a nuclear agreement, while reports of expanded U.S. military positioning in the region have elevated tail-risk concerns. Although markets are not yet pricing an imminent conflict, the situation has been sufficient to maintain a steady underlying bid for bullion and prevent deeper pullbacks.

That said, gold‘s upside has remained measured rather than explosive due to offsetting interest-rate dynamics. The Fed’s preferred core PCE gauge accelerated to 3.0% year-over-year in December, highlighting persistent inflation pressures. Several Fed officials, including Miran and Bostic, have emphasized the need to keep policy mildly restrictive, while Logan warned she is not fully convinced inflation is on a smooth path back to 2%. These signals have kept real yields from falling sharply, limiting golds breakout potential.

Structurally, however, the broader backdrop for precious metals remains supportive. Central bank demand continues to provide a strong floor, ETF positioning has stabilized after January‘s volatility, and markets still expect eventual Fed easing into 2026. Combined with ongoing geopolitical uncertainty and renewed fiscal questions in the U.S., gold appears biased toward gradual strength on dips, even if near-term gains remain capped by the “higher-for-longer” rate narrative. Also, traders will closely watch the upcoming speech from President Trump for fresh signals on trade policy and geopolitical posture in the near term. Any escalation in rhetoric or policy uncertainty could reinforce safe-haven flows into gold, while a more measured tone may keep bullion’s advance gradual but still biased to the upside on dips.