Gold Tests Two-Month Highs Above $5,220 Amid Rising US Tariffs and Inflation Pressures

New York | EcoPulse24

Gold continued its upward trajectory on Friday, exceeding $5,220 per ounce and posting gains of nearly 1%, as investors weighed escalating US trade policies and stronger-than-expected inflation data, reinforcing gold's role as a safe haven amid rising systemic risks.

Spot gold reached $5,258.19, up $73.85 or 1.42%, testing its highest levels in nearly two months. This move followed the US administration's announcement of a 10% global tariff under Section 122, with official signals that it could rise to 15% after the latest Supreme Court ruling, reigniting trade war concerns.

Price action reflects clear defensive flows, especially as US-Iran nuclear talks in Geneva stall and security developments intensify in the Middle East. These factors have boosted demand for gold as a hedge against geopolitical risks and market volatility.

Metals market volumes coincided with data showing US core producer prices rising 0.8% in January, the largest monthly increase since mid-2025. The reading strengthened the dollar and pushed back expectations for the first fully priced-in Fed rate cut to July. However, gold maintained its upward momentum, benefiting from safe-haven flows that outweighed the impact of a stronger US currency.

Gold's market value received further support from broad portfolio repositioning, with AI-linked equities seeing heavy sell-offs and liquidity shifting towards long-term Treasuries, driving the 10-year yield to a four-month low. Declining real yields enhance gold’s appeal, as it competes more favorably against fixed-income assets.

Conversely, the inflation-interest rate equation remains a sensitive balancing factor; persistent 'hot' data could limit further gains if it strengthens expectations of tighter monetary policy. Nevertheless, a tough trade environment and ongoing political risks provide structural support for gold in the near term.

EcoPulse24 Analysis:
Gold’s rise reflects a confluence of trade and geopolitical risks and fluctuating monetary policy expectations. Its ability to climb despite a strong dollar underscores the depth of defensive demand. As long as tariffs and regional risks persist, gold will retain its appeal as a strategic hedge, with the potential to trade near cyclical highs unless there is a fundamental shift in inflation or interest rate trends.