Gold extended its rally on Friday, climbing past $5,080 per ounce and testing monthly highs after a landmark Supreme Court ruling struck down broad reciprocal global tariffs, triggering sharp cross-asset volatility.
The initial reaction saw the U.S. dollar retreat, providing immediate support to bullion. However, the move was quickly reversed after President Donald Trump announced plans to implement a new 10% global tariff via executive order, reintroducing uncertainty into global trade policy.
This rapid policy pivot intensified risk aversion across markets and reinforced gold’s role as a defensive hedge.
Growth Slowdown Adds to Bullish Momentum
Further underpinning the rally was a softer-than-expected Q4 GDP print of 1.4%, signaling cooling economic momentum. At the same time, core PCE inflation remains sticky near 3%, complicating the policy outlook for the Federal Reserve.
The combination of:
has strengthened gold’s macro tailwinds.
Heightened Middle East risks — including a significant U.S. military buildup near Iran — are also sustaining the geopolitical risk premium embedded in bullion prices.
Policy Crosscurrents: Split FOMC, Firm Labor Market
Despite a divided FOMC and a resilient labor market, traders appear increasingly focused on downside growth risks and trade uncertainty rather than near-term rate policy stability.
The legal setback to the White House’s tariff framework has not reduced protectionist risks — instead, it has shifted them into executive channels, prolonging uncertainty.
Technical Outlook
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Immediate resistance: $5,100–$5,120
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Break above opens path toward fresh record territory
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Initial support: $5,020
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Major support: $4,980–$5,000 psychological zone
Momentum remains constructive, with dips likely to attract buyers while geopolitical and macro uncertainty persist.
Analysis By -Shahzad Ahmad
Frequently Asked Questions
Why did gold surge above $5,080?
Gold rallied due to a combination of factors:
A Supreme Court ruling striking down reciprocal global tariffs
Immediate trade policy uncertainty after President Donald Trump signaled a new 10% tariff via executive order
Weak Q4 GDP growth (1.4%)
Ongoing geopolitical tensions in the Middle East
These developments boosted safe-haven demand.
How does weak GDP support gold prices?
Slower economic growth increases expectations that the Federal Reserve may eventually shift toward a more accommodative stance. Even if rate cuts are delayed, weaker growth enhances gold’s appeal as a defensive asset during economic uncertainty.
Why is sticky inflation bullish for gold?
Core PCE inflation near 3% suggests inflation remains persistent. Gold is traditionally viewed as a hedge against purchasing power erosion, especially when inflation remains elevated while growth slows — a stagflation-type backdrop.
What technical levels should traders watch?
Resistance: $5,100–$5,120
Break above could open fresh record highs
Support: $5,020
Major support: $4,980–$5,000
Holding above $5,000 keeps short-term bullish momentum intact.
What could reverse the current gold rally?
Gold could face pressure if:
The U.S. dollar strengthens sharply
Bond yields rise aggressively
Trade tensions de-escalate
Geopolitical risks ease
A strong risk-on shift across global equities could temporarily cap upside momentum.
What could reverse the current gold rally?
Gold could face pressure if:
The U.S. dollar strengthens sharply
Bond yields rise aggressively
Trade tensions de-escalate
Geopolitical risks ease
A strong risk-on shift across global equities could temporarily cap upside momentum.
