Gold traded near $5,095 in early Asian trading on Monday. Prices rose as tariff uncertainty increased demand for safe-haven assets.
On Friday, the US Supreme Court ruled Donald Trump’s tariffs illegal. Soon after, Trump used Section 122 of the Trade Act of 1974 to set a 10% global import tariff, then raised it to 15%.
Trade Tensions Lift Safe Haven Demand
He also said national security tariffs under Section 232 and existing Section 301 tariffs will stay in place. Continued trade risks have supported gold prices.
Investors are also watching US-Iran diplomacy. Oman’s foreign minister said the next round of talks will be held on Thursday in Geneva.
On Friday, Trump said limited strikes against Iran are possible. Iranian officials said Tehran expects a possible agreement to be ready in the coming days.
Markets will also watch US Producer Price Index data due on Friday. The figures could affect expectations for US Federal Reserve interest rate decisions.
Central Bank Buying Underpins The Market
Central banks are the biggest gold holders. The World Gold Council said they added 1,136 tonnes worth about $70 billion in 2022, the highest yearly purchase on record.
With both trade-war fears and hopes for a US-Iran deal, gold’s implied volatility has jumped. This suggests options strategies that benefit from big swings may be more suitable than direct futures positions right now. The market is pricing in a large move, so traders should be ready for either a breakout or a sharp reversal this week.
The new global tariffs are a strong driver for gold. They echo the uncertainty seen during the 2018–2019 trade disputes, which supported precious metals. This price support also sits on top of a multi-year trend of central bank buying. Central banks added a record 1,037 tonnes in 2023 and continued heavy purchases through 2025. This steady demand can help put a floor under prices, which may make dips attractive for long-term bulls.
However, the US-Iran talks on Thursday are a major risk for long positions. In the past, gold has fallen quickly when successful talks removed geopolitical risk from prices. A surprise agreement could trigger profit-taking and push gold back below the $5,000 psychological level.
Friday’s Producer Price Index report is the next key test. Inflation stayed stubborn in 2024 and 2025, and any sign of renewed price pressure could keep the Fed hawkish. Because gold does not pay interest, it often struggles when rates are expected to stay high.
With a major “either-or” event on Thursday, traders may consider strategies that can profit from a large move in either direction, such as a long straddle. This means buying both a call and a put option. The position can gain if talks fail and gold jumps, or if talks succeed and gold drops. The main question is whether the move will be big enough to cover the higher cost of these options.
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