Gold rose for a fourth straight day on Monday and climbed back above $5,200 late in North American trading. XAU/USD was up nearly 2%. Prices touched a four-week high of $5,219 as the US Dollar weakened.
The US Supreme Court ruled against tariffs imposed under the International Emergency Economic Powers Act (IEEPA). After the ruling, Donald Trump announced 10% global tariffs, then raised them to 15% under Section 122. These Section 122 tariffs expire 150 days after they take effect.
Geopolitical Risk And Safe Haven Flows
Middle East tensions also lifted demand. Reports said Washington is weighing a targeted strike on Iran, followed by a broader attack aimed at removing the Supreme Leader by force. Talks are due to resume in Geneva on Thursday. On Monday, the US embassy in Beirut told non-essential staff and family members to leave.
US data showed Q4 2025 growth of 1.4% quarter-on-quarter. Core PCE inflation rose 3% in December. Swap markets are pricing about 55 basis points of rate cuts.
The Dollar index fell 0.15% to 97.64, and the 10-year US yield dropped six basis points to 4.025%. Key resistance levels cited are $5,250, $5,451, $5,500, and $5,600, with support at $5,025 and $4,702. Central banks bought 1,136 tonnes of gold in 2022, worth about $70 billion.
Gold’s move above $5,200 is being driven by heavy geopolitical and trade uncertainty. New global tariffs and rising tension with Iran are fueling a classic safe-haven bid. This backdrop points to continued upside potential and elevated volatility in the weeks ahead.
Options Positioning And Market Signals
This move is not only short-term speculation. It also reflects steady institutional demand. Central banks have kept buying aggressively, adding more than 1,000 tonnes a year in recent years. That kind of demand helps put a floor under prices.
Soft US data from late 2025, along with an ISM Manufacturing PMI still in contraction at 47.1, leaves the Federal Reserve in a tough spot. Even with December inflation at 3%, the Fed may face pressure to cut rates to support slowing growth. Rate cuts would likely weaken the dollar and support higher gold prices.
For derivatives traders, this setup favors call options to gain upside exposure with defined risk. With major event risk ahead—Geneva talks and President Trump’s State of the Union address—volatility is likely to stay high. Call spreads may be a lower-cost way to position for a move toward $5,400–$5,500.
Options positioning is already leaning bullish. Open interest in April contracts at the $5,400 and $5,500 strikes has risen by more than 30% over the past week. This suggests many traders are positioning for a retest of all-time highs.
Similar conditions have appeared before, especially in the late 1970s: high inflation, geopolitical conflict, and a weaker dollar. In that period, gold rose sharply in a relatively short time. Today’s setup echoes parts of that history, which may mean the rally still has room to run.
It also makes sense to hedge against any sudden easing in tensions. A positive outcome in the Geneva talks could trigger a sharp (though likely temporary) drop in gold. Traders who are long may want to watch $5,100 as a key support level and consider put options for protection.
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