Geopolitical Risks, Trade Uncertainty Help Gold Rally

The start of this week saw gold surge to its highest level in three weeks, supported by rising geopolitical strain between Iran and the United States and renewed uncertainty surrounding American trade policy, both of which strengthened demand for safe-haven assets. This comes after the U.S. Supreme Court blocked President Donald Trump’s attempt to use the IEEPA as a basis for implementing broad reciprocal tariffs late last week. 

In response, the White House turned to Section 122 of the 1974 Trade Act, introducing a temporary across-the-board import tariff of 10%. This figure was later increased to 15%. The tariff came into effect on February 24 and may be enforced for up to 150 days, without requiring congressional authorization. 

As expected, this development has reignited concerns over global trade stability and raised fresh doubts about the credibility of America’s fiscal and policy direction. As a result, investors have shifted toward gold as a safe-haven asset while scaling back exposure to investments linked to the U.S. 

At the same time, lingering ambiguity around nuclear negotiations between Iran and the United States is adding to market anxiety. Reports pointing to a significant buildup of American military forces in the Middle East have heightened speculation about possible action against Iran. This comes as the countdown for talks to resume in Geneva winds down. 

Tehran has signaled openness to certain compromises regarding its nuclear activities, provided sanctions are eased and its right to uranium enrichment is formally acknowledged, in an effort to prevent further escalation. 

Together, these factors are sustaining elevated geopolitical risks, allowing gold to maintain its upward momentum. That said, a more decisive move could materialize once Chinese markets reopen following the Lunar New Year break. 

From a macroeconomic standpoint, this week’s calendar is relatively quiet, leaving gold particularly reactive to developments related to trade policy and geopolitical tensions. Notable data releases include the Conference Board’s Consumer Confidence report and the ADP Employment Change four-week average. 

President Donald Trump delivered the State of the Union address, with last month’s Producer Price Index and jobless claims also set to be released this week. 

Overall, gold’s next move will likely hinge on how trade tensions, geopolitical risks, and U.S. economic data evolve in the coming days. If uncertainty surrounding new U.S. tariffs intensifies or markets grow more concerned about policy credibility, safe-haven flows could accelerate. However, if diplomatic progress emerges or trade tensions ease, gold could struggle to extend gains. 

For exploration companies like Collective Mining Ltd. (NYSE American: CNL) (TSX: CNL), the continued rally of gold prices creates unique opportunities to attract investors seeking to benefit from the favorable market outlook for gold over the coming years. 

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