Gold Climbs as Dollar Softens on Tariff Jitters

Gold Gains Ground as Markets Brace for Policy Shifts

Gold prices inched higher on Thursday, supported by a weaker U.S. dollar and renewed safe-haven demand as investors weighed fresh uncertainty around U.S. trade tariffs and diplomatic talks with Iran.

The modest uptick reflects a broader market mood: cautious, watchful, and increasingly sensitive to geopolitical and economic signals that could shape the Federal Reserve’s next move.

According to a Reuters report, bullion markets are responding to a mix of currency movements, trade policy concerns, and expectations of potential interest rate cuts later this year.

Spot Gold Edges Higher After Three-Week Peak

Spot gold rose 0.3% to $5,184.43 per ounce by 0110 GMT, holding near levels last seen more than three weeks ago. Earlier this week, the metal touched a multi-week high, underscoring renewed investor appetite for defensive assets.

Meanwhile, U.S. gold futures for April delivery slipped 0.5% to $5,199.20, reflecting some near-term profit-taking in the derivatives market.

The divergence between spot prices and futures suggests that while physical demand and safe-haven flows remain firm, traders are recalibrating short-term expectations.

Softer Dollar Lends Support to Bullion

A key factor behind gold’s resilience was the U.S. dollar’s softer start to the day.

The greenback eased as global markets absorbed stronger-than-expected earnings from Nvidia, which boosted risk appetite in equity markets. At the same time, investors remained cautious ahead of new details on U.S. tariff measures targeting foreign imports.

Because gold is priced in dollars, a weaker U.S. currency typically makes the metal more affordable for buyers using other currencies. That dynamic often provides underlying support during periods of dollar weakness.

Currency analysts note that even small shifts in the dollar index can influence gold flows, especially when broader macro uncertainty lingers.

Trade Policy Uncertainty Returns to the Fore

Adding to investor unease, U.S. Trade Representative Jamieson Greer said on Wednesday that tariff rates for certain countries would rise to 15% or more, up from the recently imposed 10% baseline.

While no specific countries were named and no further details were provided, the statement reinforced concerns about potential trade friction and its ripple effects across global markets.

Trade policy remains a key driver of investor sentiment. Historically, escalating tariffs have weighed on global growth projections and heightened volatility, conditions that often benefit gold as a traditional store of value.

Market participants are now waiting for clearer guidance on which trading partners could be affected and how quickly the new tariff structure might take effect.

Focus Shifts to Federal Reserve Outlook

Beyond trade policy, monetary policy expectations are shaping gold’s trajectory.

Traders are currently pricing in three quarter-point interest rate cuts from the Federal Reserve this year, according to CME’s FedWatch Tool. Lower interest rates typically reduce the opportunity cost of holding non-yielding assets like gold, enhancing its appeal.

However, the Fed’s path remains data-dependent.

Investors are closely watching the weekly U.S. initial jobless claims data due later Thursday. The labor market has been a central pillar of the Fed’s economic assessment, and any signs of softening could reinforce expectations of policy easing.

Economic releases scheduled for the day include:

• Japan’s revised Leading Indicators for December (0500 GMT)

• Final EU Consumer Confidence data for February (1000 GMT)

• U.S. initial jobless claims for the week ending February 21 (1330 GMT)

Each data point carries potential implications for currency markets and, by extension, precious metals.

U.S.-Iran Talks Add Geopolitical Layer

Geopolitics also entered the equation as U.S. and Iranian officials met in Geneva for another round of negotiations aimed at resolving their longstanding nuclear dispute.

The talks come amid heightened tensions and reports of a significant U.S. military buildup in the region. Diplomats are working to avoid further escalation and potential strikes.

Any instability in the Middle East , a critical region for global energy markets, can quickly spill into financial markets. Historically, such tensions have bolstered demand for gold as a hedge against geopolitical shocks.

While no immediate breakthroughs were reported, the mere backdrop of high-stakes negotiations has kept investors cautious.

Silver, Platinum and Palladium Extend Gains

Gold was not alone in its upward movement.

Spot silver rose 0.1% to $89.49 per ounce after climbing to a three-week high on Wednesday. The metal has benefited from both safe-haven interest and its industrial demand profile.

Platinum advanced 0.3% to $2,294.30, while palladium gained 0.8% to $1,809.62. Both metals reached three-week highs in the previous session, reflecting broader strength across the precious metals complex.

Industrial metals like platinum and palladium are particularly sensitive to global growth expectations, making their rise notable in a market balancing optimism from corporate earnings with caution over trade and geopolitical risks.

What It Means for Investors

For now, gold’s direction appears tied to three key variables:

• The U.S. dollar’s trajectory

• Clarity on U.S. trade policy

• Incoming economic data shaping Fed rate expectations

If the dollar continues to soften and labor data points to a cooling economy, gold could find further support. On the other hand, stronger economic numbers or clearer trade policy easing could temper safe-haven demand.

Analysts widely view the current environment as one of “measured uncertainty”, not panic, but enough ambiguity to keep defensive assets in play.

A Market in Waiting

Gold’s modest rise on Thursday reflects a market caught between optimism and caution.

Strong corporate earnings and steady global data offer reasons for confidence. Yet unresolved trade questions and delicate geopolitical negotiations remind investors that risks remain close to the surface.

As the week unfolds, attention will remain fixed on U.S. economic indicators and any updates from Geneva. For bullion traders, the interplay between policy signals and macro data will likely determine whether gold can sustain its recent momentum, or retreat from multi-week highs.

(With inputs from Reuters.)

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