(Bloomberg) — Gold climbed after a run of three weekly gains as heightened uncertainty over US trade policy unsettled markets and hurt the dollar.
Bullion rose as much as 2.2% to top $5,200 an ounce. US President Donald Trump said Saturday he would impose a global tariff of 15% after the Supreme Court ruled against his use of emergency powers to levy duties. A weaker dollar made the metal cheaper for many buyers.
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The court decision could have implications for the US deficit as tariff revenues come under threat, as well as on the country’s trade balance. The 15% tariff rolled out by the White House is meant to replace those the court invalidated, though it’s only permitted to last up to 150 days and in cases of fundamental international payments problems.
Gold’s recent run of gains has helped the metal recover ground following a sudden rout at the turn of the month, which had dragged prices down a record. The advance has been underpinned by long-term factors aiding the commodity — including heightened geopolitical tensions and investor wariness of sovereign bonds and currencies.
“There are enough structural factors in favor of gold in the medium term,” said Vasu Menon, strategist at Oversea-Chinese Banking Corp. “In the short term, however, expect gold prices to be volatile after the sharp gains in recent months given still-unfolding developments with US trade policy, and the situation in Iran.”
The Supreme Court ruling also has cast doubt over deals the US negotiated with major trading partners. The European Union is poised to freeze the ratification process of an agreement with Washington until there’s more clarity, Indian officials will postpone a trip to the US, while a member of Japan’s ruling party called the situation “a real mess.”
What Bloomberg Strategists Say…
Gold’s strength amid a lower positioning from hedge funds shows that there’s further position upside. The Commodity Futures Trading Commission data shows that the net-long position for gold futures have fallen to the lowest level in nearly a year.
—Mark Cranfield, Markets Live strategist
In the Middle East, traders are watching a standoff between Washington and Tehran. While the two nations are in talks over a potential deal over Iran’s nuclear program, the US has amassed a vast military force in the region, prompting concernGold clos there could be limited strikes or a full-blown conflict.