By Anushree Mukherjee
(Reuters) – Gold prices firmed on Tuesday as concerns over the global trade war fuelled demand for safe-haven assets, while investors awaited a key U.S. inflation reading.
Spot gold rose 0.5% at $3,361.39 per ounce, by 0816 GMT. U.S. gold futures was up 0.3% to $3,370.40.
The U.S. dollar was down 0.1%, making gold cheaper for buyers holding other currencies. [USD/]
“Gold is edging higher as bulls look to take advantage of the dollar that’s a touch lighter today,” said Han Tan, chief market analyst at Nemo.Money.
“Gold enjoys plenty of supportive factors, from expectations for Fed rate cuts, U.S. President Donald Trump’s tariff threats, as well as persistent geopolitical and economic risks.”
The European Union on Monday accused the U.S. of resisting efforts to strike a trade deal and warned of countermeasures if no agreement is reached to avoid the punishing tariffs Trump has threatened to impose starting on August 1.
Trump escalated his trade war on Saturday, announcing a 30% tariff on most EU and Mexican imports, after issuing similar warnings to other trading partners.
Meanwhile, the U.S. consumer price index (CPI) report, due at 1230 GMT, could give investors more guidance on the Federal Reserve’s policy path.
U.S. consumer prices likely picked up in June, potentially marking the start of a long-anticipated, tariff-induced increase in inflation that has left the Fed cautious about resuming rate cuts. Markets currently anticipate 48 basis points worth of rate cuts by the end of this year, starting in October.
Elsewhere, spot silver gained 0.5% to $38.31 per ounce, after hitting its highest level since September 2011 on Monday.
“If the current gold to silver price ratio is maintained, at gold prices above $3,440/oz, we will see silver above $40/oz,” said WisdomTree commodities strategist Nitesh Shah.
Platinum rose 0.2% to $1,366.30, while palladium fell 0.3% to $1,189.69.
(Reporting by Anushree Mukherjee in Bengaluru; Editing by Harikrishnan Nair)
