During the Spring Festival period, a combination of macroeconomic events and geopolitical risks drove gold prices higher. The London spot gold price rose by 3.64%, closing at $5,226 per ounce. (Statistical period: February 14, 2026, to February 23, 2026)
Tensions in the Middle East persist, with negotiations and military standoffs occurring simultaneously. A new round of talks between the United States and Iran is scheduled for February 26 in Geneva. Concurrently, the U.S. has been amassing significant military forces in the region, including the deployment of its largest aircraft carrier to a key base in the eastern Mediterranean and multiple U.S. military aircraft landing in Israel. Reports suggest former President Trump is considering a "preliminary strike" against Iran, with the possibility of larger-scale military action in the coming months if diplomacy fails. Iran has responded firmly, with a Foreign Ministry spokesperson stating that any attack would be considered an act of aggression, with consequences for the aggressor. The sharp increase in geopolitical risk has driven safe-haven capital into gold, making the outcome of the U.S.-Iran talks on February 26 a key focus for post-holiday markets.
In a separate development, a U.S. court ruled that the global reciprocal tariffs previously imposed by the Trump administration were unlawful. On February 20, Eastern Time, the U.S. Supreme Court ruled that the tariffs implemented globally under the International Emergency Economic Powers Act (IEEPA) exceeded presidential authority and were unconstitutional. This decision invalidates the "fentanyl tariffs" and "reciprocal tariffs" previously levied by Trump under IEEPA, though tariffs imposed under Section 232 of the Trade Expansion Act (targeting specific industries) and Section 301 of the Trade Act (targeting specific countries) remain unaffected.
In response to the ruling, Trump announced on February 20 that he would sign a new executive order under Section 122 of the Trade Act of 1974, imposing an additional 10% tariff on global imports for 150 days, on top of existing tariffs. The following day, he increased this rate to 15%. However, Section 122 differs fundamentally from IEEPA: it is designed to address balance-of-payments crises, allows the president to impose supplemental tariffs for a limited period, but does not permit differential tariff rates for different countries and is subject to strict time and procedural limits. The tariff rate cannot exceed 15%, and the duration is capped at 150 days, with any extension requiring congressional approval. Therefore, this short-term measure is unlikely to serve as a stable, long-term basis for tariff policy.
The invalidation of the reciprocal tariffs may impact gold in two ways: it could reduce U.S. government revenue, heightening concerns about the nation's debt burden, while also alleviating domestic inflationary pressures, potentially creating room for the Federal Reserve to cut interest rates. Both factors could be supportive of gold prices.
Looking ahead, after a period of volatility and adjustment, gold prices are showing signs of stabilization, with volatility notably decreasing, highlighting their investment appeal. A prudent approach to asset allocation is recommended for gold investments.
Over the medium to long term, the macro-structural factors supporting gold remain largely intact. These include sustained gold purchases by global central banks amid de-dollarization trends, pressure on the U.S. dollar's long-term credibility due to "fiscal dominance" policies, and systemic risks arising from a increasingly fragmented global geopolitical landscape. Gold's role as a hedge against "international order collapse risk" and "sovereign currency risk" remains prominent.
Key signals for gold investors to monitor in the coming week include: (1) developments in the Middle East and the outcome of U.S.-Iran talks on February 26, and (2) changes in U.S. tariff policies.
Related products include Gold ETF (518880)/Link A (000216)/Link C (000217) and Gold Equity ETF (159321).
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