Gold Firms as US Tariff Uncertainty, Cooler Inflation Data Lend Support

An employee takes granules of 99.99 percent pure gold in a workroom during production at Krastsvetmet precious metals plant in the Siberian city of Krasnoyarsk, Russia, May 23, 2024. REUTERS/Alexander Manzyuk/File Photo
An employee takes granules of 99.99 percent pure gold in a workroom during production at Krastsvetmet precious metals plant in the Siberian city of Krasnoyarsk, Russia, May 23, 2024. REUTERS/Alexander Manzyuk/File Photo
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Gold Firms as US Tariff Uncertainty, Cooler Inflation Data Lend Support

An employee takes granules of 99.99 percent pure gold in a workroom during production at Krastsvetmet precious metals plant in the Siberian city of Krasnoyarsk, Russia, May 23, 2024. REUTERS/Alexander Manzyuk/File Photo
An employee takes granules of 99.99 percent pure gold in a workroom during production at Krastsvetmet precious metals plant in the Siberian city of Krasnoyarsk, Russia, May 23, 2024. REUTERS/Alexander Manzyuk/File Photo

Gold prices edged up on Thursday as persisting uncertainty over tariffs drove safe-haven demand, while a cooler-than-expected US inflation print supported the dollar by bolstering rate cuts expectations.
Spot gold gained 0.1% to $2,934.08 an ounce as of 0745 GMT, while US gold futures eased 0.1% to $2,943.70.
"I think $3,000 is the next logical target, likely to be reached sometime over the next several months," said Marex analyst Edward Meir.
"The CPI data was encouraging but I suspect that the tariff increase has yet to be picked up in the inflation data."
The US consumer price index increased less than expected last month, data showed, but the improvement is likely temporary given the aggressive US import tariffs, which are expected to make most goods more expensive in the months ahead.
Lower inflation leaves more room for the Federal Reserve to cut rates and non-yielding gold thrives in a low-interest rate setting.
Earlier this month, US President Donald Trump triggered a trade war, increasing the tariffs on goods from China to 20% and imposing a new 25% duty on Canadian and Mexican imports.
He later dialed back, providing a one-month exemption for any goods that meet the rules of origin under the US-Mexico-Canada Agreement on trade.
Trump also reversed course on a pledge to double tariffs on steel and aluminium from Canada to 50%, hours after announcing the higher tariffs.
The tariffs are widely expected to stoke inflation and economic uncertainty and had pushed gold to a record high of $2,956.15 on February 24.
Investors now await the US Producer Price Index (PPI) data due at 1230 GMT for further insights into the Fed's monetary policy.
Spot silver fell 0.8% to $32.97 an ounce, platinum lost 0.7% to $977.05 and palladium shed 0.5% to $943.72.



Oil Dips as Economic Concerns, Supply and Demand Expectations Weigh

A pumpjack brings oil to the surface in the Monterey Shale, California, US April 29, 2013. REUTERS/Lucy Nicholson/File Photo
A pumpjack brings oil to the surface in the Monterey Shale, California, US April 29, 2013. REUTERS/Lucy Nicholson/File Photo
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Oil Dips as Economic Concerns, Supply and Demand Expectations Weigh

A pumpjack brings oil to the surface in the Monterey Shale, California, US April 29, 2013. REUTERS/Lucy Nicholson/File Photo
A pumpjack brings oil to the surface in the Monterey Shale, California, US April 29, 2013. REUTERS/Lucy Nicholson/File Photo

Oil prices slipped on Thursday after surging in the previous session on a larger-than-expected draw in US gasoline stocks, as markets weighed macroeconomic concerns and demand versus supply expectations. Brent futures were down 30 cents to $70.65 a barrel at 1140 GMT, while US West Texas Intermediate crude futures fell 31 cents to $67.37 a barrel.

Both benchmarks rallied about 2% on Wednesday after US government data showed tighter-than-expected oil and fuel inventories.

US gasoline inventories fell by 5.7 million barrels, more than the 1.9 million-barrel draw expected by analysts, while distillate stocks also dropped more than anticipated, despite gains in crude stocks, Reuters reported.

"Declining US gasoline inventories raised expectations for a seasonal demand increase in spring, but concerns about the global economic impact of tariff wars weighed on the market," said Hiroyuki Kikukawa, chief strategist at Nissan Securities Investment.

"With strong and weak factors progressing simultaneously, it has become difficult for the market to lean decisively in one direction or the other," he added. US President Donald Trump threatened on Wednesday to escalate a global trade war with further tariffs on European Union goods, as major US trading partners said they would retaliate for trade barriers already erected by the US president.

Trump's focus on tariffs has rattled investors, consumers and business confidence, and raised US recession fears. With the US president's stated commitment to cheaper oil, Citi analysts said their outlook for Brent by the second half of 2025 is $60 a barrel.

Global oil supply could

exceed demand

by around 600,000 barrels per day this year, the International Energy Agency said on Thursday, revising down its 2025 demand growth forecast. Meanwhile, the Organization of the Petroleum Exporting Countries said on Wednesday that Kazakhstan led a sizeable jump in February crude output by the wider OPEC+, highlighting a challenge for the producer group in enforcing adherence to agreed output targets, even as it intends to unwind production cuts.

Worries about flagging jet fuel demand weighed further on markets, with JP Morgan analysts saying that US Transportation Security Administration data showed "passenger volumes for March have decreased by 5% year-over-year, following stagnant traffic in February".

However, recent firm global demand numbers limited overall market weakness.

"As of March 11, global oil demand averaged 102.2 million barrels per day, expanding 1.7 million barrels per day year-over-year and exceeding our projected increase for the month by 60,000 barrels per day," the JP Morgan analysts added.