Inflation Nears, Trade War Cracks, Gold Rises!
Gold prices rose on Wednesday as investors remained cautious amid lingering uncertainty over the U.S.-China trade truce and awaited key inflation data for clues on the Federal Reserve’s interest rate trajectory.
Spot gold was up 0.4% at $3,336.20 an ounce by 0946 GMT. U.S. gold futures were up 0.4% at $3,347.
U.S. and Chinese officials said on Tuesday they had agreed on a framework to get their trade truce back on track and remove restrictions on China’s rare earth exports, but gave little sign of a lasting resolution to their long-running trade differences.
In April, the U.S. and China imposed tit-for-tat tariffs on each other, sparking a trade war. After negotiations in Geneva last month, the two countries agreed to reduce tariffs from triple-digit levels. "The market is well aware that the path to a trade deal between major economies is not an easy one," said Han Tan, chief market analyst at Exinity Group.
"Gold will remain supported as long as global trade tensions risk escalating further, or even remaining elevated for a longer period."
The U.S. consumer price index (CPI) report, due at 1230 GMT, could provide investors with further clues on the Fed's policy path.
"The market is expecting a rise in the CPI figure, which would keep the Fed's rate cut odds in check," Tan added.
The central bank will keep interest rates steady for at least a few more months, according to most economists polled by Reuters, as inflation risks rise again due to President Donald Trump's tariff policies.
Elsewhere, spot silver fell 0.8% to $36.27 an ounce after hitting a more than 13-year high earlier this week. "We expect silver to reach $38/oz in the coming months. Market deficit considerations and USD weakness are key to higher prices - a test of $40/oz is possible," UBS said.
Platinum rose 3.1% to $1,259.63, its highest since May 2021. Palladium rose 1.7% to $1,077.89.
Source: Reuters
