Gold firmer on cooler-than-expected CPI data

Bengaluru — Gold prices edged higher on Thursday as uncertainty over tariffs persisted, driving safe-haven demand, while a cooler-than-expected US inflation print also supported bullion by strengthening expectations of rate cuts.

Spot gold was up 0.4% at $2,943.66/oz by 3am GMT, while US gold futures firmed 0.2% to $2,951.90.

“I think $3,000 is the next logical target, likely reached sometime over the next several months,” said Marex analyst Edward Meir. “CPI [consumer price index]data was encouraging but I suspect that the tariff increase has yet to be picked up in the inflation data.”

Data showed that the US CPI increased less than expected last month, but the improvement is probably temporary against the backdrop of aggressive tariffs on imports that are expected to raise the cost of most goods in the months ahead.

Lower inflation leaves more room for the US Federal Reserve to cut interest rates, and non-yielding gold thrives in a low-interest rate setting.

Trump early this month triggered a trade war, increasing the tariffs on goods from China to 20% and imposing a new 25% duty on Canadian and Mexican imports.

He later dialled back and provided a one-month exemption for any goods that meet the rules of origin under the US-Mexico-Canada Agreement on trade.

Trump also reversed course on Tuesday afternoon on a pledge to double tariffs on steel and aluminium from Canada to 50%, hours after announcing the higher tariffs.

Trump’s tariffs are widely expected to stoke inflation and economic uncertainty, and have prompted safe-haven gold to reach a record high of $2,956.15 on February 24.

Investors now await US producer price index (PPI) data due later in the day to gain further insights into the Fed’s monetary policy.

Spot silver rose 0.1% to $33.26/oz, platinum added 0.4% to $987.90, and palladium gained 0.9% to $957.60.

Reuters