Gold edges higher after US CPI data fuels inflation concerns

SINGAPORE: Gold prices edged higher on Wednesday as investors assessed a rise in US consumer prices and awaited further clarity on the country’s trade stance, particularly in light of President Donald Trump’s recent tariff threats.

As of 0401 GMT, spot gold was up 0.4 per cent at $3,334.12 per ounce, while US gold futures inched 0.1 per cent higher to $3,340.90.

“Gold is currently consolidating with a slight downward bias due to a stronger dollar,” said Brian Lan, managing director at GoldSilver Central in Singapore. “Still, trade discussions with the US are ongoing, and the market remains uncertain. Many investors are turning to safe-haven assets.”

Over the weekend, Trump threatened to impose a 30 per cent tariff on imports from Mexico and the European Union, with the measure expected to take effect from August 1. However, he signalled on Monday that he remained open to further talks.

US consumer prices rose in June at their fastest pace in five months, driven by increased costs for certain goods. The data suggests that tariffs may be contributing to inflationary pressures, potentially prompting the Federal Reserve to delay any rate cuts until September.

Despite this, Trump called on the Fed to lower interest rates, arguing that consumer prices remained low.

Dallas Federal Reserve Bank President Lorie Logan commented that the central bank may need to keep rates unchanged for a longer period to ensure inflation stays contained amid tariff-related cost increases.

Gold typically performs well during times of economic uncertainty and in low interest rate environments, as lower yields reduce the opportunity cost of holding the non-yielding metal.

Investors are now turning their attention to the US Producer Price Index data, expected at 1230 GMT on Wednesday, for further direction.

Gains in gold were capped as the US dollar and benchmark 10-year Treasury yields held near recent multi-week highs.

In other precious metals, spot silver rose 0.3 per cent to $37.82 per ounce. Platinum was up 0.2 per cent at $1,379.46, while palladium gained 0.4 per cent to $1,210.66.

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