Two events are colliding right now that will define the gold market for months to come…
First, the U.S. Supreme Court just struck down most of President Donald Trump’s global tariffs. And no one knows exactly what it will mean for global trade and American affordability.
Second, an escalating military standoff with Iran has the White House scrambling aircraft carriers into the Persian Gulf. It’s the largest military buildup in decades, with President Trump giving a 10- to 15-day deadline for Iran to strike a nuclear deal.
These two factors… along with a “twist” from the Federal Reserve that few investors saw coming… explain why gold just clawed its way back above $5,000 an ounce after weeks of gut-wrenching swings. And they offer a window into why the metal may have much further to go…
Iran Lights a Fuse for War
After touching an all-time high of roughly $5,600 in late January, the metal crashed almost 15% in two trading sessions.
Treasury Secretary Scott Bessent called it a “classical, speculative blowoff,” and traced much of the frenzy to Chinese retail and institutional traders who had been buying with reckless leverage on the Shanghai Futures Exchange.
To start this week out, gold had traded back up to around that $5,000 mark on thin volumes from the Lunar New Year but strong physical demand from India and China.
That changed on Wednesday as tensions between the U.S. and Iran, which had been simmering for weeks, boiled over. As my colleague Corey McLaughlin noted yesterday…
Just a day after the talks wrapped up with the promises of more discussion, an unnamed White House official signaled that we could soon see more U.S. military presence in the Middle East.
Earlier today, President Donald Trump said he’ll decide whether to make a deal or “take it a step further” (i.e., attack Iran) sometime over the next 10 days.
Now, this could be another way for the U.S. to apply negotiating pressure on Iran, or it could be a signal of the U.S. going to war with Iran, or both.
Meanwhile, CNN reported that the White House wants all U.S. military forces deployed to the region to be in position by mid-March. That includes the carriers USS Gerald R. Ford and USS Abraham Lincoln, along with accompanying warships and dozens of aircraft.
In response, Iran has partially closed the Strait of Hormuz for naval exercises.
The Strait of Hormuz matters because roughly 20 million barrels of oil flow through it every day. That accounts for about a fifth of global oil consumption, per the U.S. Energy Information Administration.
Disruption there doesn’t just spike oil prices. It also threatens the inflation trajectory that the Federal Reserve has been trying to manage… the potential for interest-rate cuts… and the price of gold.
Federal Reserve Considering a Rate Hike?
On Wednesday, the Federal Reserve released the minutes from its January 27-28 meeting. Buried inside was a detail that, under normal circumstances, would have been terrible for gold… As NBC reported:
“Several” Fed officials thought there was a “possibility that upward adjustments” to interest rates “could be appropriate” if inflation continues to track above 2%, as it has for nearly five years.
The deliberations underscore how inflation remains a pressing concern for the central bank, even as public attention remains primarily on the labor market.
The minutes also suggest that the Fed’s internal conversations remain largely insulated from President Donald Trump’s monthslong pressure campaign to get the central bank to lower borrowing costs.
This is the kind of Fed whispering that would typically mean a pullback in gold. Instead, gold rallied on the news.
That may mean that the old “safe haven” playbook of the U.S. dollar and Treasury securities could be fracturing… amid a rise in the potential for a dollar debasement trade.
The Supreme Court’s Tariff Decision
In a 6-3 decision, the Supreme Court ruled this morning that President Trump exceeded his authority in imposing tariffs under the International Emergency Economic Powers Act. As the Associated Press reported…
The majority found that the Constitution “very clearly” gives Congress the power to impose taxes, which include tariffs. “The Framers did not vest any part of the taxing power in the Executive Branch,” Chief Justice John Roberts wrote.
Stocks climbed on the news… but gold soared even more.
The ruling invalidates Trump’s sweeping “reciprocal” tariffs and the 25% duties on Canadian, Chinese, and Mexican goods imposed under the fentanyl emergency declaration.
However, it does not touch tariffs on steel and aluminum, which were enacted under a different legal authority. And previously, the World Gold Council had flagged this ruling as one of the most consequential events for commodity markets this year.
Gold imported for investment had already been exempted from IEEPA tariffs by the White House. But the broader tariff regime had been creating distortions across every corner of global trade, increasing inflationary pressure and complicating the Fed’s path forward. Taking a significant chunk of those tariffs off the board could ease inflation, strengthen the case for rate cuts, and weaken the dollar further.
For gold, the implications were expected to cut both ways…
- Less inflation risk could mean fewer reasons to own hard assets like gold.
- But a weaker dollar, along with rate cuts, has historically been a bullish signal for gold.
Nonetheless, so far gold is up about 3 times the S&P 500’s movement today. And it probably has plenty of room to go…
Why the Bull Case for Gold Hasn’t Changed
Gold has soared nearly 70% over the past year. And all the reasons that we discussed for gold going higher still remain in play…
Governments everywhere responded to recent crises by conjuring trillions of new dollars, euros, and yen into existence. That has consequences.
Global debt has never been higher, and while inflation has cooled from its peak, it hasn’t gone away.
Billionaire hedge-fund mogul Ray Dalio has been warning that as debt spirals and governments print their way out of trouble, the smart money will flow from paper assets into real ones.
Gold sits at the top of that list. It can’t be printed or inflated out of existence. That’s the appeal. As the dollar has weakened in recent years, gold priced in dollars has surged.
And right now, any number of headlines could quickly move gold $100, $200, or even $1,000 higher in a single trading session…
- We have an unresolved military standoff with Iran.
- We have an administration likely to reimpose tariffs through new legal channels.
- And we have a Federal Reserve signaling that it might be more of a wild card in 2026 than most investors expect.
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Today, gold is still on a “10% off sale” compared with its all-time high just a few weeks ago. But it likely won’t last for long.
In fact, gold could hit $10,000 an ounce sooner than almost anyone on Wall Street expects. To hear an exclusive interview with our publisher, Matt Weinschenk, and The No. 1 Gold Play for 2026, click here.
We’ve seen the dip. Now we’re seeing another surge higher. It’s clear the move in gold isn’t over.
