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

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.