Gold rises on tariff uncertainty, cooler US inflation data

Safe-haven gold rose on Wednesday, aided by tariff uncertainty and a cooler inflation report that keep bets for a US rate cut intact.

Spot gold was up 0.7% at USD 2,935.59 an ounce as of 02:32 p.m. ET (1832 GMT). US gold futures settled 0.9% higher at USD 2,946.80.

“The concern continues to be that we’re going to have tariffs and that will ultimately potentially cause some inflation,” said Bart Melek, head of commodity strategies at TD Securities.

Data showed that the US consumer price index rose 0.2% last month after accelerating 0.5% in January. However, the improvement is likely temporary against the backdrop of aggressive tariffs on imports that are expected to raise the cost of most goods in the months ahead.

Lower US inflation may give the Fed more leeway to cut interest rates, Melek added.

Last year, the Federal Reserve reduced interest rates by 100 basis points. Financial markets expect the Fed to resume cutting rates in June because of the deteriorating economic outlook, after pausing in January.

Non-yielding gold thrives in a low interest environment and is considered a safe investment during periods of economic and geopolitical turmoil.

The US Producer Price Index (PPI) and weekly jobless claims data due on Thursday are the next data sets on investors’ radar.

On the trade policies front, President Donald Trump’s increased tariffs on all US steel and aluminum imports took effect on Wednesday, stepping up a campaign to reorder global trade in favor of the US and drawing swift retaliation from Europe.

Spot silver added 1.1% to USD 33.31 an ounce.

Silver should outperform gold in our base case of a modest recovery in manufacturing activity, although a sharper slowdown in US growth is a key risk, UBS said in a note.

Platinum was up 1.3% at USD 987.40 and palladium rose by 0.2% to USD 947.50.

(Reporting by Ashitha Shivaprasad in Bengaluru, additional reporting by Ishaan Arora; Editing by Elaine Hardcastle, Shailesh Kuber, and Alan Barona)