Gold pares gains after U.S. Supreme Court strikes down Trump tariffs

Gold pares gains after U.S. Supreme Court strikes down Trump tariffs

Gold Pares Gains After U.S. Supreme Court Strikes Down Trump Tariffs

The U.S. Supreme Court’s ruling to invalidate President Trump’s sweeping tariffs under the International Emergency Economic Powers Act (IEEPA) initially spurred a rally in gold prices, which surged above $5,000 per ounce on February 20, 2026. However, the precious metal pared gains in subsequent trading as markets digested the decision’s broader implications for trade policy and economic uncertainty. Gold, which has risen 16% since January 2026 amid geopolitical tensions and expectations of Federal Reserve rate cuts, remains a key hedge against currency devaluation and global instability.

The 6-3 court decision determined that Trump overstepped his authority by using the 1977 IEEPA statute—which does not explicitly authorize tariffs—to impose duties on imports from nearly all U.S. trading partners. While the ruling curtails the administration’s broad tariff powers, Trump has announced plans to impose a 10% global tariff under the Trade Act of 1974, a narrower statute with a 150-day expiration period. Analysts note that this alternative framework limits the administration’s flexibility, though it could still sustain elevated trade tensions and market volatility.

Gold’s short-term rally reflects its role as a safe-haven asset amid geopolitical risks, including heightened U.S.-Iran tensions and concerns over Western fiscal policies. Goldman Sachs analysts project gold could reach $5,400 per ounce by year-end, citing sustained central bank demand and potential Fed easing. UBS, however, forecasts a higher target of $6,200, emphasizing ongoing diversification from perceived fiscal risks.

Despite the court’s decision, uncertainties persist. The Trump administration faces challenges in replacing invalidated tariffs with legally defensible measures, while importers and businesses brace for potential refunds and supply chain disruptions. Meanwhile, gold’s performance underscores investor caution, with prices remaining elevated as markets weigh the likelihood of prolonged trade policy shifts and economic headwinds.

For now, gold’s trajectory will depend on the pace of geopolitical developments, Fed policy, and the administration’s ability to recalibrate its tariff strategy under constrained legal authority.