Gold prices rose to an over four-month high on Tuesday and were close to a record high as safe haven demand was boosted by heightened uncertainty over U.S. President Donald Trump's trade tariffs.

Persistent bets that the Federal Reserve will cut interest rates in September kept gold underpinned, as did sustained weakness in the dollar, which hit a one-month low.

Spot gold rose 0.2% to $3,483.02 an ounce, while gold futures for December rose 0.2% to $3,554.32/oz by 20:41 ET (00:41 GMT).

Spot prices were trading less than $20 away from a late-April record high of $3,500/oz.

US tariff uncertainty, rate cut bets boost gold

Gold's latest round of gains were spurred by heightened uncertainty over Trump's trade tariffs, after an appeals court ruled last week that they were illegal.

While the appeals court said Trump's tariffs could remain in place until mid-October, the president criticized the decision and said he would challenge the ruling in the Supreme Court.

The development sparked increased uncertainty over the economic impact of Trump's tariffs, a bulk of which took effect in August. Any ruling against the tariffs will also force Washington to negotiate recent deals with major trading partners.

Persistent bets on a September rate cut also boosted gold, even as data released last week showed inflation remaining sticky.

Markets were seen pricing in a nearly 85% chance for a 25 basis point cut by the Federal Reserve in September, CME Fedwatch showed.

This came even as PCE price index data for July showed inflation remaining sticky and pulling further above the Fed's 2% annual target.

Fed Chair Jerome Powell had signaled earlier in August that the Fed was considering a 25 bps reduction in September, but had still not committed to the move amid concerns over sticky inflation.

Source: Investing.com