Gold prices traded near their highest levels on Thursday, boosted by safe-haven demand amid tariff concerns and a U.S. inflation report that reinforced expectations of future interest rate cuts.

Spot gold was up 0.5% at $2,946.68 an ounce, as of 1131 GMT. Bullion hit a record high of $2,956.15 on Feb. 24 amid uncertainty over U.S. tariffs.

U.S. gold futures were up 0.3% at $2,956.

"Gold prices continue to be supported by the prospect of a tariff-driven economic slowdown, which could potentially accelerate expectations of a U.S. Fed rate cut," said Ole Hansen, head of commodity strategy at Saxo Bank.

"I maintain my bullish stance on gold, expecting an economic slowdown or even stagflation to drive demand and prices higher." 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. In response, China and Canada have retaliated with tariffs of their own.

Data on Wednesday showed consumer prices cooled more than analysts had expected, suggesting the Fed could cut interest rates this year.

The Fed cut interest rates by 100 basis points last year, but they have held steady since then. Investors have favoured non-yielding gold in a low-interest environment.

Investors now await US Producer Price Index (PPI) data due at 1230 GMT for further insight into Fed monetary policy.

"A weaker-than-expected PPI report could fuel Fed cut bets, fuelling gold's rally. However, a hotter-than-expected report could cap gains, inviting sellers to challenge support at $2,930," said Lukman Otunuga, senior research analyst at FXTM.

Spot silver was flat at $33.21 an ounce, platinum fell about 1% to $974.45, while palladium fell 0.2% to $947.17.

"We have raised our annual silver price forecast by 2-4%, given the characteristics of the precious metal, despite lowering our industry supply-demand balance," Macquarie said in a note. (Newsmaker23)

Source: Reuters