The Gold price (XAU/USD) edges higher to around $3,080 during the early Asian session on Wednesday. The safe-haven demand amid escalating trade tensions between the United States and China provides some support to the precious metal.
US President Donald Trump said on Wednesday that he authorized a 90-day pause on new tariffs for most US trade partners to 10% to allow trade negotiations with those countries. However, Trump raised the tariffs imposed on imports from China to 125% "effective immediately" due to the "lack of respect that China has shown to the World's Markets."
The economic uncertainty and the fears that Trump's tariff policies would trigger inflation and dampen economic growth boost the Gold price, a traditional safe-haven asset. "Ultimately gold continues to be seen as a hedge against instability here. We got a situation where tariffs are becoming a big problem, and you have inflationary expectations going higher, and that's manifested by higher yields," said Bart Melek, head of commodity strategies at TD Securities.
Traders will keep an eye on the US Consumer Price Index (CPI) inflation report, which is due later on Thursday. Any sign of a hotter-than-expected outcome, could lift the Greenback and weigh on the USD-denominated commodity price in the near term.
Source: Fxstreet
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