After four consecutive sessions of gains, gold prices retreated as some investors decided to lock in profits. The precious metal is down more than 1% and is trading at $5,166. The pullback coincided with the return of Chinese market participants after the Lunar New Year holiday—an event that typically boosts activity and can amplify short-term volatility.
Earlier, gold had rallied more than 7% in just four sessions, supported by heightened uncertainty surrounding U.S. trade policy and rising geopolitical tensions in the Middle East, including an escalation in the U.S.–Iran standoff.
Tariffs remain a key source of anxiety
One of the main drivers of market nervousness remains tariffs. Investors have described the market as “confused” following Donald Trump’s announcement that he wants to raise the global tariff rate to 15%, after a U.S. Supreme Court ruling went against the concept of so-called “reciprocal” tariffs. At the same time, a prior directive introducing a 10% import tax took effect on Tuesday, while the potential start date for the higher rate remains unclear.
In Europe, concerns are growing that the new policy could push tariffs on certain exports above the levels allowed under the existing trade agreement. This has increased the risk of trade disputes and strengthened demand for assets perceived as safe havens.
Geopolitics is moving both metals and oil
The second axis of uncertainty is geopolitics—an influence visible in both metals and oil. Oil prices rose as investors weighed the likelihood of a nuclear agreement with Iran amid mixed signals from the United States. President Trump said he prefers a diplomatic solution, while simultaneously warning of consequences if no deal is reached. In the background, U.S. military presence in the region has been reinforced.
A key market fear is the potential disruption of shipping through the Strait of Hormuz, a critical route for transporting oil and LNG. Any escalation there could quickly feed into energy prices and logistics costs.
Talks on the nuclear deal are expected to resume on Thursday in Geneva. Another sign of heightened tensions was the U.S. decision to evacuate part of its staff from the embassy in Beirut, citing security concerns.
The escalation is also producing a tangible “side effect” in the form of rising crude transportation costs. Long-term charter rates for VLCC supertankers have jumped to around $92,000 per day, the highest level since 1988. Markets interpret this surge in costs as a more expensive “insurance premium” on supply in case the regional situation deteriorates.
Banks still see upside potential
Despite the volatility, some major banks—including BNP Paribas, Deutsche Bank, and Goldman Sachs—continue to expect a return to an uptrend in gold, pointing to persistent demand drivers. These include concerns about the Federal Reserve’s independence, shifts away from bonds and currencies, and enduring geopolitical risks.
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