Overview
The U.S. Supreme Court's decision to invalidate the administration's use of the 1977 International Emergency Economic Powers Act (IEEPA) to impose broad "reciprocal" tariffs is likely to have a positive effect on gold prices, but Deutsche Bank analysts say the impact will be modest.
Market reaction
Gold initially dipped just below the $5,000 per ounce threshold after the ruling before recovering. In later trading, spot gold was reported mostly unchanged at $5,164.31 an ounce, while U.S. Gold Futures were down 0.9% at $5,179.40 per ounce. Those moves underline the nuanced market view that the court's decision alters one policy lever but does not eliminate related fiscal or trade tools.
Analysts' assessment
Deutsche Bank analysts, including Michael Hsueh, argued that the removal of the IEEPA-based tariffs should be "gold positive but only marginally so." Their reasoning emphasizes two constraints. First, the White House appears able to approximate the effect of IEEPA-authorized tariffs through alternative legal authority, notably temporary levies under Section 122 of a separate trade statute from the 1970s. Second, tariff receipts had been counted as one element that could blunt the fiscal impact of the One Big Beautiful Bill Act (OBBBA), which the analysts note reduces government revenue more than it reduces spending.
As the analysts put it: "We think the evidence points to it being gold positive but only marginally so, because the U.S. can come close to, but not fully, replicating IEEPA with Section 122, and because tariff revenue plays a role in ameliorating the projected fiscal deterioration resulting from the OBBBA which reduces government revenue more than spending."
Fiscal mechanics and timing
The bank's note highlights an additional limitation tied to the temporary nature of Section 122 tariffs. Those levies require Congressional approval to extend beyond an initial 150-day window. If that approval is not secured, the analysts say the ameliorative effect of tariff revenue on the fiscal outlook could be smaller or shorter-lived than currently assumed by the Congressional Budget Office, implying larger deficits than presently projected.
Implications for gold
Deutsche Bank frames the connection between fiscal outcomes and bullion demand in conventional terms: higher spending and wider deficits can, in theory, weaken confidence in the U.S. dollar, stoke inflation fears, and increase investor demand for safe-haven assets such as gold. Given the bank's view that the court decision narrows but does not close off alternative policy options, the resulting pressure on gold prices is expected to be limited.
This analysis is based on the Deutsche Bank note and market price moves reported following the court ruling. It outlines the direct links the analysts identify between tariff policy, fiscal projections, and safe-haven demand for gold.