Gold hovered near $5,190 per ounce on Friday, extending a two-day advance and positioning for a fourth consecutive weekly gain. Investors continue to balance renewed US trade policy uncertainty, fragile Middle East diplomacy, and evolving Federal Reserve expectations — all of which are reshaping safe-haven demand and rate-sensitive positioning.

Tariff Policy Keeps Risk Premium Elevated

Bullion traded around $5,187.39 per ounce on February 27, up modestly on the day but maintaining upward weekly momentum. President Donald Trump’s new 10% global tariffs came into force earlier this week, with the potential to rise to 15% for certain countries following the Supreme Court’s ruling against broader emergency duties.

While the revised tariff structure is narrower than initially proposed, it preserves uncertainty around trade flows and global supply chains. Markets are particularly sensitive to whether trading partners retaliate or renegotiate, developments that could amplify volatility in currencies and sovereign bonds — both key drivers for gold.

Despite a 4.29% decline over the past month following a sharp correction from January’s record high of $5,608.35, gold remains 81.57% higher than a year ago, underscoring the strength of the longer-term macro bid.

US-Iran Diplomacy Adds Crosscurrents

Geopolitical developments remain another pillar of support. Washington and Tehran are scheduled to resume negotiations next week after reported progress in recent talks, though US officials signaled lingering dissatisfaction.

Any durable diplomatic breakthrough could soften geopolitical risk premiums, particularly in energy markets. However, continued uncertainty sustains demand for defensive assets, especially amid military posturing in the region.

Gold’s recent resilience suggests investors are not fully pricing in de-escalation, preferring to maintain protection against potential setbacks.

Fed Expectations Temper Upside Potential

Monetary policy remains a counterweight to bullion’s rally. Chicago Fed President Austan Goolsbee has indicated that rate cuts remain possible if inflation continues easing, while Governor Stephen Miran has expressed support for a cumulative one-percentage-point cut in 2026.

Still, market pricing has shifted. The probability of a rate cut by June has fallen to roughly 50%, and expectations for a third reduction by year-end have largely faded. Elevated rates typically weigh on non-yielding assets such as gold, limiting upside momentum.

The metal’s path forward will likely hinge on three forces: clarity on tariff escalation, the trajectory of US-Iran negotiations, and confirmation that inflation is cooling sufficiently to unlock a more dovish Fed stance.

For now, gold appears supported by structural uncertainty, even as tactical rate expectations cap aggressive upside.