Gold traded near $5,195 in early Asian trading on Friday. It inched closer to $5,200 as demand rose on uncertainty about US tariffs. Markets are also waiting for the US January Producer Price Index (PPI) later on Friday. Donald Trump said he would impose a flat 15% tariff on imports after a Supreme Court ruling ended his earlier reciprocal tariff plan. US Trade Representative Jamieson Greer said tariffs could rise to 15% or more for many countries in the coming days.

Iran Talks Temper Gold Rally

Easing US-Iran tensions could limit further gains in gold. Oman’s Foreign Minister Badr Albusaidi said the US and Iran will continue nuclear talks next week after progress in Switzerland. Technical talks are set to resume in Vienna. Economists expect US PPI to rise 0.3% month-on-month in January, down from 0.5% in December. Annual PPI is forecast at 2.6% in January, compared with 3.0% previously. If PPI comes in higher than expected, it could strengthen the case for keeping US interest rates unchanged. That can weigh on gold, since it does not pay interest. Central banks added 1,136 tonnes of gold worth about $70 billion to reserves in 2022, according to the World Gold Council. We remember the uncertainty in early 2025, when gold approached $5,200 on talk of a 15% blanket tariff. Much of that trade friction was put in place in the second half of 2025, helping keep inflation high. The latest Consumer Price Index (CPI) report for January 2026 showed headline inflation at 3.9%, still nearly double the Federal Reserve’s target.

Rates Volatility And Trading Levels

The “hotter-than-expected” inflation data throughout 2025 stopped any meaningful easing in monetary policy, as we expected. As a result, the Federal Reserve has kept policy tight, with the effective federal funds rate holding above 5.5%. These high rates are still a headwind for gold, which does not generate yield, and they limit the chance of a sharp rally. Although the US-Iran nuclear talks produced a limited deal in mid-2025, other geopolitical risks have become more important. Ongoing global uncertainty continues to support safe-haven demand for gold. This helps explain why prices have not fallen sharply despite high interest rates. The result is a tight standoff, with gold trading in a range between its 2025 highs and strong chart support. In the coming weeks, we think trading volatility may work better than making a strong directional bet. Options strategies like strangles around major events—such as the Fed meeting in March—could benefit if prices jump in either direction. Implied volatility in gold futures has been rising steadily, showing the market expects a significant move soon. We are watching key levels to plan derivative trades. Call options may look attractive if gold breaks and holds above $5,300 resistance. On the downside, put options can offer a lower-cost hedge if high rates finally push prices below the key $5,000 psychological support. The call-to-put open interest ratio shows the market remains split on gold’s next major move. Create your live VT Markets account and start trading now.

here to set up a live account on VT Markets now