Legal Risk, Fed Pivot, and Thin Liquidity Push Gold to Fresh All-Time Highs

Gold extended its historic rally this week, with prices setting a fresh all-time high of $3,475/oz on the LBMA’s PM auction, supported by a combination of legal uncertainty around US tariffs, expectations of near-term Fed easing, and ongoing safe-haven demand. Silver surged through $40/oz, its highest level in 14 years, while platinum broke back above $1,400/oz, catching up to the broader precious metals bid. 

The catalyst for gold’s sharp move higher came late Friday, when the US Court of Appeals ruled the administration’s use of IEEPA to impose reciprocal tariffs illegal (7-4). Importantly, tariffs remain in place until October 14, pending potential Supreme Court review, keeping “legal risk” alive and trade policy uncertainty elevated. Markets now anticipate that, even if IEEPA authority fails, the administration could pivot to existing trade statutes (301 and 232), sustaining the policy overhang. 

Macroeconomic drivers also aligned in gold’s favor. The Fed’s recent pivot at Jackson Hole, coupled with Friday’s in-line PCE print, left expectations intact for a September rate cut. This week’s jobs report is seen as pivotal, with investors betting that a soft payrolls print could reinforce easing momentum. Thin holiday liquidity in the US and Canada amplified moves, with futures and ETF inflows accelerating into the rally. 

Looking ahead, gold’s trajectory hinges on the interplay between legal battles over tariffs, Fed confirmation hearings, and incoming US jobs data. With investor flows, geopolitical flare-ups, and trade uncertainty converging, gold remains firmly underpinned near record highs.