Gold prices rose on Tuesday, supported by safe-haven flows as trade war concerns sapped risk sentiment across wider markets, while attention was on US inflation data.
Spot gold climbed 0.8% to $2,912.88 an ounce as of 1031 GMT after hitting its lowest since March 3 in the previous session. US gold futures rose 0.6% to $2,917.90.
The dollar index hit a four-month low, making bullion less expensive for overseas buyers.
US President Donald Trump’s fluctuating trade policies – imposing and delaying tariffs on Canada and Mexico, while raising duties on Chinese goods – have roiled the global financial markets. China and Canada have responded with tariffs of their own, according to Reuters.
Over the weekend, Trump declined to predict whether the US could face a recession.
“In the short-term we expect investor focus to remain on the effect policy changes, in particular tariffs, will have on US growth and inflation expectations and how this could not only affect real rates but also further incentivize global central bank purchases,” said Trevor Yates, analyst at Global X.
“All eyes will be on Wednesday’s US February CPI print, with us expecting the pace of inflation to slow during the month.”
Federal Reserve Bank of New York’s latest Survey of Consumer Expectations showed inflation a year from now is seen at 3.1%, up a hair from January’s 3% reading. Markets currently expect Fed to cut in rates in June.
However, gold’s role as a hedge could weaken if high inflation leads to sustained higher interest rates, as it yields no interest.
Spot silver added 1.4% to $32.54 an ounce.
Platinum was up 1.2% at $970.20 and palladium gained 0.6% to $948.96.
Bank of America
expects a platinum deficit and palladium surplus for 2025, it said in a note. The bank also said that platinum fundamentals are stronger than those of palladium.
