What Happened This Week

Gold surged past $5,180 per ounce on February 25, recouping losses from the previous session and extending a rally that has seen the metal gain 78% over the past year. The catalyst: an escalating trade war between the Trump administration and the rest of the world, compounded by a constitutional crisis over presidential tariff authority.

Why Tariffs Are Rocket Fuel for Gold

The relationship between tariffs and gold is straightforward: tariffs create uncertainty, and uncertainty drives investors toward safe-haven assets. But the current situation has multiple compounding factors:

1. Inflation Expectations

A 15% tariff on all imports directly increases the cost of goods. Markets are pricing in higher inflation, which erodes the purchasing power of paper currencies — making gold more attractive as a store of value.

2. Recession Risk

Trade wars slow economic growth. If tariffs trigger retaliatory measures from trading partners, global GDP growth takes a hit. In recessionary environments, investors historically flock to gold.

3. Constitutional Uncertainty

The Supreme Court striking down the President's tariff authority while the administration continues to impose tariffs creates a constitutional grey zone. This kind of institutional uncertainty is deeply unsettling for markets and profoundly bullish for gold.

4. Dollar Weakness

Trade wars weaken the dollar long-term as they reduce international demand for US goods and strain trade relationships. A weaker dollar mechanically pushes gold higher, since gold is priced in USD globally.

Silver's Explosive Move: 7% in a Single Day

While gold gets the headlines, silver's performance this week has been even more dramatic. Silver surged 7% in a single session — a move that would take gold months under normal conditions.

Three factors are driving silver's outperformance:

• Smaller market: The silver market is roughly 1/10th the size of gold's, meaning the same amount of buying pressure creates larger price movements
• Physical supply deficit: Silver has been in a structural supply deficit for several years, with industrial demand (solar panels, electronics) competing with investment demand
• Gold-silver ratio compression: The ratio is normalising from historically elevated levels, meaning silver has more room to run in percentage terms

Big Banks Are Now Calling $6,000+ Gold

JPMorgan, Goldman Sachs, and several major banks have revised their gold forecasts upward, with many now targeting $6,000 per ounce or higher. The reasoning is consistent across institutions:

• Central bank buying continues at record pace — the World Gold Council reports buying momentum sustained through late 2025 and into 2026
• De-dollarisation accelerating as countries diversify reserves away from US Treasuries
• Fiscal deficits in the US and Europe expanding, undermining confidence in fiat currencies
• Geopolitical risk premium now structural rather than temporary (Iran, tariffs, Taiwan)

Gold has climbed from approximately $2,900 per ounce in early 2025 to over $5,180 today — a gain of roughly 78% in just over a year. If the $6,000 forecasts prove accurate, that represents a further 16% upside from current levels.

What This Means for Bahrain Investors

Bahrain occupies a unique position in this environment. As a tax-free jurisdiction for 24K gold investment, Bahrain investors capture the full benefit of gold's rise without the drag of VAT, capital gains tax, or import duties.

The Bahrain Advantage in a Tariff World

• Zero VAT on 24K gold — while EU buyers pay up to 20% VAT, and tariffs add costs elsewhere, Bahrain investors buy at near-spot prices
• BHD pegged to USD — the Bahraini Dinar's peg means gold's USD gains translate directly to BHD gains with zero currency risk
• No tariff exposure — Bahrain's free trade agreements and exemption from the US tariff regime (as a GCC partner) mean gold imports remain unaffected
• Physical possession — in an era of institutional uncertainty (courts vs. executive, sanctions, freezes), holding physical gold bars provides sovereignty over your own wealth

Frequently Asked Questions

Why did gold go up after Trump's tariff?

Tariffs increase trade uncertainty, inflation expectations, and recession risk — all of which drive investors toward gold as a safe haven. The escalation from 10% to 15%, combined with the Supreme Court constitutional clash, created a perfect storm for gold demand.

What is the gold price today?

As of late February 2026, gold is trading around $5,180-$5,200 per ounce. For live prices in Bahraini Dinar, visit mssbars.com.

Why is silver going up so fast?

Silver surged to approximately $91 per ounce with single-day gains of 7%. The move is driven by safe-haven demand from tariff chaos, a multi-year physical supply deficit, and silver's smaller market size which amplifies price movements.

Should I buy gold now or wait for a dip?

The catalysts driving gold higher (tariffs, Iran, central bank buying, de-dollarisation) remain firmly in place. Many investors use dollar-cost averaging — buying fixed amounts at regular intervals — to manage timing risk. Major banks are forecasting $6,000+ gold, suggesting further upside.