Gold Rises Amid Economic Fears and Anticipation of U.S. Data
Gold prices edged slightly higher on Thursday as markets awaited developments on U.S. President Donald Trump's tariff plans, which could ignite a global trade war. Investors also looked ahead to the release of the U.S. Producer Price Index (PPI) data, set to be published later today.
Gold Price Movements:
As of 00:24 GMT, spot gold rose 0.1% to $2,905.12 per ounce, after declining more than 1% in the previous session following the release of U.S. Consumer Price Index (CPI) data. Gold had reached a record high of $2,942.70 on Tuesday.
Meanwhile, U.S. gold futures remained steady at $2,929.60 per ounce, according to Reuters data.
Factors Influencing Prices:
The U.S. Consumer Price Index increased more than expected in January, supporting the Federal Reserve’s stance of maintaining interest rates for the time being. Federal Reserve Chair Jerome Powell told the House Financial Services Committee that the data indicated ongoing inflation challenges, warranting a cautious approach until inflation returns to the 2% target.
Gold is traditionally seen as a hedge against inflation, but higher interest rates reduce its appeal as a non-yielding asset.
Concerns Over a Trade War:
Fears of a global trade war intensified after U.S. President Donald Trump threatened to impose retaliatory tariffs on all countries that levy tariffs on U.S. imports. This heightened concerns about the broader economic impact of escalating trade disputes and the potential for accelerated inflation in the U.S.
Investors are now focused on the upcoming Producer Price Index (PPI) data for further clues on U.S. monetary policy and interest rate trends.
Performance of Other Precious Metals:
Silver: Gained 0.1% to $32.26 per ounce. Platinum: Held steady at $992.32 per ounce. Palladium: Rose 0.2% to $975.48 per ounce. Gold prices are reflecting market uncertainty amid fears of a global trade war and its potential impact on inflation and the U.S. economy. At the same time, investors are awaiting key economic data that could influence the Federal Reserve's future monetary policy decisions.
