Gold Clears $5,100 as Trade Chaos and Weak Growth Fuel Safe-Haven Surge

Gold surged past $5,100 per ounce on Friday, testing monthly highs amid one of the most turbulent weeks for global trade policy in recent memory. The catalyst was a landmark Supreme Court ruling striking down reciprocal tariffs — a decision that initially sent the dollar lower and bullion sharply higher. Any relief, however, was short-lived. President Trump moved swiftly to counter the ruling, vowing to impose a new 10% global tariff via executive order, ensuring that the underlying uncertainty driving gold's ascent remained firmly intact.

The macroeconomic backdrop only reinforced the metal's appeal. U.S. GDP growth slowed to a 1.4% annualized rate in the fourth quarter, falling well short of economist forecasts of 3.0%. The miss was attributed to the drag from the government shutdown and softening consumer spending — a combination that stoked fears of a broader growth slowdown heading into the new year. Adding to the inflationary overhang, the Federal Reserve's preferred price gauge, the Personal Consumption Expenditures index, rose 0.4% in December, exceeding the 0.3% consensus estimate. The data painted a familiar and uncomfortable picture for policymakers: cooling growth alongside stubborn inflation.

Geopolitical risk provided an additional tailwind. Tensions in the Middle East escalated further this week following a substantial U.S. military deployment near Iran. President Trump issued a stark warning Thursday, stating that Iran must reach a deal on its nuclear program or face severe consequences — language that rattled markets and reinforced demand for safe-haven positioning.

Silver outpaced gold on the session, surging $6.09, or 7.76%, to $84.62 per ounce — bringing its weekly advance to 9.42%. Gold, by comparison, gained approximately $65, or 1.30%, on the week, a solid performance in its own right but one overshadowed by silver's breakout move.

The U.S. dollar, meanwhile, staged a recovery of its own. The dollar index closed the week up 0.89% at 97.79 — its largest weekly gain in four months — buoyed by modestly stronger economic data and the release of Fed minutes suggesting policymakers remain in no hurry to cut interest rates. The resilience of the dollar adds a notable dimension to gold's rally; historically, a stronger greenback creates headwinds for dollar-denominated commodities. That gold held and extended gains despite dollar strength underscores the depth of current safe-haven demand.

With trade policy in flux, growth disappointing, inflation proving sticky, and geopolitical flashpoints multiplying, precious metals appear well-positioned to remain at the center of investor attention in the weeks ahead.

Wishing you as always good trading,