Gold price (XAU/USD) builds on the previous day's bounce from the $2,864 region touched in reaction to hotter US consumer inflation figures and gains positive traction for the second straight day on Thursday. The momentum lifts the precious metal to the $2,920 area during the Asian session and is sponsored by a combination of factors.
Investors remain worried that US President Donald Trump's new levies on commodity imports and reciprocal tariffs would spark a global trade war, which continues to underpin the safe-haven Gold price. Apart from this, the emergence of fresh US Dollar (USD) selling lends additional support to the bullion and contributes to the move up.

Meanwhile, signs of still sticky inflation in the US suggest that the Federal Reserve (Fed) will stick to its hawkish stance and hold interest rates steady for an extended period. This led to the overnight spike in the US Treasury bond yields, which should limit deeper USD losses and cap the non-yielding yellow metal amid still overbought conditions.

Gold price draws support from rising trade tensions and fresh USD selling
The initial market reaction to the latest US consumer inflation figures turned out to be short-lived amid worries over US President Donald Trump's trade tariffs, which continue to benefit the safe-haven Gold price.
Trump signed executive orders on Monday to impose 25% tariffs on steel and aluminum imports into the US and also promised broader reciprocal tariffs to match the levies other governments charge on US products.
The US Bureau of Labor Statistics reported on Wednesday that the headline US Consumer Price Index rose 0.5% in January – the most since August 2023 – and the yearly rate climbed to 3% from 2.9% in December.
Meanwhile, the core CPI, which excludes food and energy prices, nudged up by 0.4% on a monthly basis and jumped 3.3% from a year ago compared to 3.1% expected, pointing to underlying inflationary pressures.
Fed Chair Jerome Powell told US lawmakers that the battle with rising prices wasn't finished yet, which meant that any further interest rate cuts would have to wait until it was clear inflation would return to the 2% target.
The Atlanta Fed President noted that the labor market is performing incredibly well and the GDP is more resilient than expected, though the latest inflation numbers show careful monitoring is still needed.
Market participants were quick to react and now see just one Fed rate cut by the end of this year, assisting the yield on the benchmark 10-year US government bond to register its biggest one-day rise since December.
The US Dollar (USD), however, struggles to attract any meaningful buyers and languishes near the lower end of its weekly range touched on Wednesday, further lending support to the USD-denominated commodity.
Thursday's US economic docket features the release of the Producer Price Index and the usual Weekly Initial Jobless Claims, which might influence the USD and provide some impetus to the XAU/USD pair.
Gold price attracts buyers for the second straight day amid a combination of supportive factors.
Concerns about Trump's trade tariff and a modest USD weakness underpin the XAU/USD pair.
Reduced Fed rate cut bets warrant some caution before positioning for a further positive move.

Source: Fxstreet