As gold continues to surge to record highs (~$3600), two major risks exist that could impact its momentum—one potentially positive, and the other negative.
The Potential Removal of Trump’s Tariffs
A federal appeals court recently ruled that Trump’s tariffs, imposed under the International Emergency Economic Powers Act, were unlawful. As a result, U.S. businesses have paid over $210 billion in tariffs that are now considered illegal.
Trump’s administration is preparing an appeal to the Supreme Court, and if the tariffs are reversed, it could reduce Treasury revenue. This could lead to increased borrowing, potentially putting downward pressure on gold prices.
Concerns Over the Fed’s Independence
Concerns about the Federal Reserve’s independence also pose a risk to gold. If these concerns grow, markets could price in a higher risk premium against the dollar, which could boost gold’s appeal.
Helping to moderate these concerns, at least for now, two Republican senators recently announced they would block any replacement for Fed Governor Lisa Cook until her lawsuit over her firing is resolved.
For the exact date and time of these major economic events, import the BlackBull Markets Economic Calendar to receive alerts directly in your email inbox.
Trading involves risk and may not be suitable for all investors. The information provided in this article is for educational purposes only and does not constitute financial advice. Always conduct thorough research and seek professional advice before making any investment decisions.
