Rise in Gold and Silver Prices Globally

SadaNews Economy - Gold prices have risen amid a decline in the US dollar, as investors assess the next steps from the White House regarding tariffs after the US Supreme Court nullified the broad global tariffs imposed by President Donald Trump.

The price of gold in spot transactions early Saturday morning (at 8:30 AM Palestine time) was $5,104.34 per ounce, while the price of silver reached $84.64.

The Bloomberg dollar spot index, which measures the performance of the US currency, fell by 0.2%.

Earlier, the Supreme Court stated that Trump overstepped his authority when he relied on a federal emergency powers law to impose his "reciprocal" tariffs globally, alongside targeted import taxes. The ruling nullifies a significant portion of the tariffs introduced by Trump during his second term. The decision indicated that the US Treasury may need to refund tariffs paid by importers, leading to reduced future revenues, according to Bart Meilke, Global Head of Commodity Strategy.

Meilke explained, "This will put pressure on the budget and increase speculation that monetary tools may be used to finance the government. He added: "This benefits gold," as the potential measures are likely to keep interest rates low. Gold typically performs well in a low-interest environment as it does not yield a return.

The US dollar fell by as much as 0.3%, pushing gold prices up by as much as 1.6%, considering the precious metal is priced in US currency.

Ben McMillan from IDX Advisors stated, "The market recognizes that this will be a messy legal battle stretching over years," noting that the Supreme Court's decision did not specify details regarding the mechanism for refunding tariffs. He added, "All of this is referred to lower courts, meaning we will see a large number of individual lawsuits."

Trump said in a press conference yesterday that alternatives would be used to replace the rejected tariffs. Although the US Constitution grants the US Congress the authority to impose taxes and tariffs, lawmakers have delegated some powers to the executive branch under several laws.

Trump clarified that he will impose a 10% global tariff under Section 122, in addition to the currently imposed tariffs. He also announced that all tariffs related to national security imposed under Section 232, as well as existing tariffs under Section 301, remain fully in effect.

Gold Price Fluctuations

The price of gold fluctuated yesterday after Russia announced that its central bank sold gold from its reserves in January, marking the first decrease since last October.

Central bank purchases have played a pivotal role in gold's rise over the past three years, providing strong support for prices. With 300,000 ounces of bullion brought to the open market, this raised concerns about potential short-term weakness in gold, in addition to high volatility following a historic price drop at the end of January.

Nevertheless, the factors that previously supported gold prices above $5,500 per ounce largely remain in place, including a broader shift away from sovereign bonds and currencies, as well as geopolitical risks. Recent US actions toward Iran contribute to increased global uncertainty, enhancing the appeal of safe-haven assets like gold.

The US military is deploying a wide range of forces in the Middle East, while Trump stated that Iran has a deadline of 10 to 15 days at most to secure an agreement regarding its nuclear program. A major US strike against Iran, where leaders are concerned about the stability of the regime following widespread unrest, could carry the risks of potentially drawing Washington into a third war of its choosing in the region since 1991.

Banks, including BNP Paribas and Goldman Sachs Group, state that they expect prices to resume their upward trend. Goldman Sachs analysts Lina Thomas and Dan Stroeven noted in a memo that central banks, a key driver of gold's rise, remain eager to bolster their holdings as a hedge against geopolitical and financial risks, despite the high volatility that pressured purchases in December.