- Gold futures surge above $5,200 as US-Iran tension remains intact ahead of the third round of talks in Geneva.
- President Trump’s recent speech weakened the dollar, helping gold bulls further post meaningful gains.
- Fed’s patience until clear signs of disinflation limits the gold rally despite three potential rate cuts in 2026.
Gold futures held onto their earlier gains, just below the $5,200 mark. The precious metal is trading near a monthly high as rising geopolitical risks and uncertainty over US trade policy have increased demand for the safe-haven asset. Gold futures went up 0.80% to above $5,200, showing strength despite the Fed’s hawkish view.
The main reason for the rally is the rising tensions in the Middle East. On Thursday, the US and Iran will start a third round of nuclear talks in Geneva. This diplomatic activity is occurring as the US is sending more troops to the area, which is making investors cautious about potential market swings. The anxiety helped the whole precious metals market, with spot silver rising 2.95% to $90.09 per ounce and platinum rising 3.89% to $2,245.00.
At the same time, currency markets are dealing with the effects of President Donald Trump’s trade plans. After the Supreme Court ruled against his initial broad tariff orders, the administration went ahead with a 10% tax on non-exempt goods. Trump has said he wants to raise the tax to 15%.
Trump defended the tariffs in his State of the Union address, saying they were necessary for the economy to “turn around,” even though there were warnings of retaliation and problems with the supply chain. The uncertainty has pushed the US Dollar Index (DXY) down to 97.80, which is good news for dollar-denominated bullion.
However, the Federal Reserve’s firm stance on interest rates kept gains limited. The minutes from the January FOMC meeting and recent comments from officials, such as Boston Fed President Susan Collins and Richmond Fed President Thomas Barkin, suggest that the central bank will keep rates unchanged until disinflation is clearly back on track. The Fed can be patient because the economy is doing well, as evidenced by the CB Consumer Confidence Index rising to 91.2. Still, the markets are pricing in three rate cuts for 2026.
