(Bloomberg) — Gold fluctuated after the US Supreme Court struck down President Donald Trump’s sweeping global tariffs, driving down the dollar, just as Russia disclosed it sold the precious metal from its reserves last month.
The Supreme Court said Trump exceeded his authority by invoking a federal emergency powers law to impose his “reciprocal” tariffs across the globe as well as targeted import taxes. Bullion slipped as much as 0.3% before recovering.
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“Gold has come under some pressure as the Supreme Court’s tariff ruling has reduced immediate trade‑related uncertainty and supported risk sentiment,” said Ewa Manthey, a commodity strategist at ING Bank. “However, that support is likely to remain constrained given that some sector-specific tariffs are still in place and alternative trade measures remain a possibility.”
The ruling came at the same time that Russia said its central bank sold gold from its reserves in January, the first decrease in since October. Central bank buying has played a crucial role in gold’s blistering rally for the past three years, providing a strong floor to prices. With 300,000 ounces of bullion now available in the open market, it raised concerns that gold may face some near-term weakness on top of heightened volatility following a historic price plunge at the end of January.
Still the factors that underpinned gold’s earlier advance to above $5,500 an ounce remain largely intact, including a wider move away from sovereign bonds and currencies, as well as geopolitical risks. The latest US moves on Iran are adding to global uncertainties, increasing the appeal for haven assets such as gold.
“Broader geopolitical risks should continue to provide an underlying floor for prices,” ING’s Manthey said.
The US military is stationing a vast array of forces in the Middle East, with Trump saying that Iran had 10 to 15 days at most to strike a deal over its nuclear program. A major US strike against the Islamic Republic, where leaders are anxious about regime stability after widespread unrest, would risk entangling Washington in a third war of choice in the region since 1991.
Banks including BNP Paribas SA and Goldman Sachs Group Inc. have said they expect prices to resume their upward trend. Central banks, a major driver of gold’s rally, remain keen to build up holdings as a hedge against geopolitical and financial risks, Goldman analysts Lina Thomas and Daan Struyven said in a note. That’s despite elevated volatility that weighed on buying in December.