Gold hit a three-week high on Monday as uncertainty over US trade policy and rising US-Iran tensions boosted demand for safe-haven assets. XAU/USD traded near $5,208, up nearly 2.20% on the day.
On Friday, the US Supreme Court ruled that President Donald Trump could not use the IEEPA to impose reciprocal tariffs. The administration then turned to Section 122 of the Trade Act of 1974 and announced a temporary flat 10% tariff on imports from all countries. That rate was raised to 15% on Saturday.
Tariffs Timeline And Middle East Risks
The tariff is set to begin on 24 February and can remain in place for up to 150 days without Congressional approval. Markets also watched reports of a major US military build-up in the Middle East, as US-Iran nuclear talks are scheduled to resume in Geneva on Thursday.
This week’s US data calendar is light: ADP and Conference Board Consumer Confidence on Tuesday, the State of the Union on Wednesday, Jobless Claims on Thursday, and January PPI on Friday. Traders are still pricing in 50 bps of rate cuts by year-end.
From a technical view, gold broke above $5,100, with RSI near 69. MACD remains positive but is losing momentum. A move above $5,200 could open the door to $5,400–$5,500. Key support levels are $4,964, $4,850, and $4,650.
Central banks bought 1,136 tonnes of gold worth about $70 billion in 2022—the largest annual purchase on record.
Looking Back At February 2025
In February 2025, gold surged as trade and geopolitical fears hit at the same time. The surprise 15% flat tariff announced by the US administration sparked a sharp flight to safety. Alongside the Iran-related military build-up, it created the kind of uncertainty that often drives gold higher.
The tariffs stayed in place for the full 150 days, lasting into July 2025. They disrupted global supply chains and helped slow US GDP growth in the second and third quarters. Industries that relied heavily on imports saw costs rise, and producer prices climbed. During that period, PPI rose by an average of 0.8% month-over-month. When the tariffs were removed, markets got some relief, but investors remained on edge about sudden policy changes.
That weakening in the economy pushed the Federal Reserve to respond. As many expected, the Fed delivered two 25-basis-point rate cuts in the second half of 2025. Lower rates supported gold through the year because they reduce the opportunity cost of holding a non-yielding asset. Steady central-bank buying also remained a major pillar of support.
Now, in February 2026, conditions feel calmer, and that can create opportunity. Geopolitical risks are still present but less intense, and trade policy looks more stable for the moment. As a result, implied volatility in gold options is much lower. The CBOE Gold Volatility Index (GVZ) is around 16, compared with peaks above 22 during last year’s tariff shock.
Lower volatility usually means cheaper options. For traders who think markets are underpricing risks—such as high global debt levels or renewed geopolitical tension—long-dated call options offer a defined-risk way to position for a potential spike in gold. This approach gives meaningful upside if a new shock hits, similar to last year’s tariff surprise.
Fundamental demand also remains strong. Central banks continued buying in 2025, adding another 1,037 tonnes to reserves. This shows an ongoing push to diversify away from the dollar. That steady demand can help put a floor under prices, which may make strategies like selling out-of-the-money puts to collect premium appealing for traders with a neutral-to-moderately bullish view.
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