Gold and silver extended their surge into early week trading, propelled by a “perfect storm” of US tariff confusion and escalating Middle East tension. The move defied earlier bearish expectations and marked a clear resumption of the rebound that began in early February.
In the near term, Gold’s decisive move back above 5,000 pscyholgoical level marks a clear turn in momentum. Further rise is expected to 5,270. Should geopolitical tensions escalate further, Gold has scope to extend toward 5,530. Silver is also advancing, with 94 emerging as the next target, though gains are likely to encounter resistance near 100 level. Given that the rally is being driven primarily by geopolitical risk rather than broad reflation dynamics, Gold is expected to outperform in terms of structure.
The primary catalyst remains policy instability in Washington. After the US Supreme Court struck down the administration’s reciprocal tariffs last week, President Donald Trump quickly countered by announcing a 10% blanket tariffs increase, but then be raised to 15% “effective immediately”, as writen in a Truth Social post.
The complication lies in implementation. A formal White House proclamation signed Friday night maintained a 10% tariff rate effective 12:01 a.m. ET on February 24. Whether the higher rate is immediate or delayed matters less than the broader takeaway: policy direction appears fluid and unpredictable. For markets, uncertainty around legal basis, enforcement timing and tariff collection creates credibility risk.
At the same time, geopolitical risk in the Middle East has intensified. The White House issued a 10-to-15-day ultimatum for Iran to sign a new nuclear agreement, backed by a visible US military build-up. Key dates now anchor volatility expectations: nuclear talks are scheduled to resume in Geneva on February 26, full US naval deployment is expected in early March, and the unofficial deadline falls between March 5 and March 10.
In the background, additional support is emerging from Asia. Monday marked the first full trading session for many regional markets after Lunar New Year. Physical demand from China is re-entering a market already primed by last week’s developments. Broad-based Dollar softness has added incremental support.
Technically, Gold’s rebound from 4,403.34 resumed decisively after breaking above 5119.18 resistance. The move confirms that the second leg of the corrective pattern from 5598.38 high remains in progress. As long as 4990.81 holds as near-term support, further gains are favored.
Silver’s break above 86.28 similarly confirms continuation of its rebound from 63.98, viewed as the second leg of the corrective pattern from 121.83 peak. Upside remains intact while 79.78 holds, with 100% projection oif 63.98 to 86.28 from 71.94 at 94.24 as next target. That said, silver’s upside should be capped near61.8% retracement of 121.83 to 63.98 at 99.73 to conclude the rebound.
