Gold prices rose on Tuesday, supported by safe-haven inflows as trade war concerns dampened risk sentiment in broader markets, while attention was on US inflation data.
Spot gold rose 0.8% to $2,912.88 an ounce by 1031 GMT after hitting its lowest since March 3 in the previous session. US gold futures rose 0.6% to $2,917.90.
The dollar index (.DXY), opens a new tab, hit a four-month low, making bullion cheaper for overseas buyers.
US President Donald Trump's volatile trade policies — imposing and delaying tariffs on Canada and Mexico, while raising duties on Chinese goods — have rattled global financial markets. China and Canada have responded with their own tariffs.
Over the weekend, Trump declined to predict whether the US could face a recession. "In the short term, we expect investor focus to remain on the impact of policy changes, particularly tariffs, on U.S. growth and inflation expectations and how this affects not only real interest rates but also the further push for global central bank buying," said Trevor Yates, an analyst at Global X.
"All eyes will be on Wednesday's February U.S. CPI report, with us expecting inflation to moderate during the month."
The Federal Reserve Bank of New York's latest Survey of Consumer Expectations showed inflation is expected to be 3.1% a year from now, up slightly from 3% in January. Markets currently expect the Fed to cut rates in June.
However, gold's role as a hedge could be weakened if high inflation leads to sustained higher interest rates, as it does not yield interest.
Spot silver rose 1.4% to $32.54 an ounce.
Platinum rose 1.2% to $970.20 and palladium rose 0.6% to $948.96.
Bank of America expects a platinum deficit and a palladium surplus by 2025, it said in a note. The bank also said that platinum's fundamentals are stronger than palladium's. (Newsmaker23)
Source: Reuters
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