Gold Above $5,100 as Tariffs and Iran Tensions Fuel Safe-Haven Demand

 

One of the most immediate drivers of precious metals prices this week is renewed trade policy uncertainty in the United States. The U.S. Supreme Court recently struck down most of former President Trump’s earlier tariff regime, prompting the administration to reintroduce a flat 15% global tariff on many imports. For a diversified investor, that tariff effectively taxes global growth by raising costs and pressuring margins across international supply chains. This policy shift has sparked concern that global trade tensions may escalate, potentially disrupting supply chains, slowing economic growth, and undermining investor confidence.

 

While tariffs are not normally discussed alongside gold and silver, the impact of trade frictions on market psychology and currency valuation is real. A weaker U.S. dollar and softer risk assets tend to lift the prices of dollar-denominated precious metals, making them more attractive to both domestic and international buyers. The renewed tariff debate and fears of potential retaliation by major trading partners have amplified these effects, underpinning gold’s rise above key price thresholds.

 

 

However, even as talks progress, robust uncertainty persists. Reports of military deployments in the Gulf and Iranian drills in and around the Strait of Hormuz have reminded investors of the ever-present risk that a diplomatic setback could quickly escalate into broader conflict. According to the Associated Press, Iran temporarily closed the Strait of Hormuz for military drills in February 2026, heightening concerns about potential disruptions to global trade routes that are vital for the transport of gold, other precious metals, and millions of barrels of oil. Such a disruption would likely cause a sharp supply shock, amplifying volatility and driving up metals prices. This backdrop supports ongoing interest in gold as a store of value, particularly among physical holders who prefer direct ownership of bullion, and it has also provided a tailwind for silver price gains.

 

 

While much of the news cycle focuses on sudden geopolitical or policy headlines, it is important for investors to also consider slower-moving, structural forces that shape the precious metals landscape over time. Mexico is a significant producer of gold and silver, and regulatory or operational developments in that mining sector could influence long-term supply dynamics. For example, shifts in mining investment sentiment or changes in mining policy might affect future production, a subtle but important factor for the physical market. These supply-side influences tend to unfold over longer periods and have a more gradual impact than the immediate effects of breaking news. Nonetheless, they are carefully factored into analysts’ longer-term outlooks. (Mining context synthesized from broader industry data.)

 

Silver’s response to recent market conditions has been especially notable. After a rough start to 2026, silver prices have rebounded sharply, rising roughly 18 percent from early-year lows as risk-driven buying picked up alongside gold. For context, this comeback has recouped nearly half of the steep 35 percent decline silver experienced from its 2025 highs. The rebound not only highlights silver’s volatility but also reflects renewed confidence in precious metals as a safe haven amid global uncertainty.

 

 

This structural backdrop is important because silver’s market is smaller and more volatile than gold’s, meaning the metal often experiences larger swings, both up and down, but also offers strong upside when demand drivers align. According to a recent Silver Institute analysis, the silver market is expected to remain in deficit for the sixth consecutive year in 2026, reinforcing a bullish narrative for investors focused on long-term value.

 

Gold and silver prices often move in tandem when safe-haven demand rises, but silver’s additional industrial demand can accelerate its recovery and future growth, especially if macro conditions remain unsettled. This has led some analysts to forecast that silver may test higher levels relative to gold, potentially narrowing the historically volatile gold-to-silver ratio. For readers tracking metals, monitoring the gold-silver ratio can offer a concrete decision tool: a move below 70:1 has historically marked inflection points where silver begins to outperform gold. Keeping an eye on this threshold can help investors identify potential opportunities or shifts in market sentiment.

 

Investor positioning in exchange-traded precious metals products continues to reflect heightened risk sentiment. According to a report from S&P Global Market Intelligence, between February 18 and February 21, 2025, investors poured $5.2 billion into precious metal ETFs amid rising geopolitical tensions and economic uncertainty, seeking safety. This distinction highlights the strong conviction among professional asset managers, while also indicating that individual investors are actively seeking exposure to precious metals. This influx of capital into bullion-backed funds signals strong confidence in precious metals as a hedge against volatility.

 

Institutional and retail buyers alike appear to be increasing allocations to physical gold and silver, viewing them as reliable safe harbors amid uncertain equity markets and currency pressures. These flows help support price levels and can intensify momentum when headlines heighten risk perceptions.