Gold gains slightly ahead of US inflation release and Fed clues 

WASHINGTON: Gold prices ticked up slightly on Tuesday as investors awaited key US inflation data that could influence the Federal Reserve’s interest rate decisions in the coming months.

As of 0151 GMT, spot gold rose 0.1 per cent to $3,346.94 per ounce, while US gold futures remained unchanged at $3,355.60.

“Gold often performs well when tariff tensions rise, and its move towards $3,350 suggests that trend is repeating,” said Tim Waterer, chief market analyst at KCM Trade. However, he noted that rising US treasury yields and a stronger dollar are capping further gains. “Unless geopolitical risks escalate, gold may need a dip in the dollar or yields to push closer to $3,400,” he added.

Markets are closely watching US consumer price data for June, set to be released at 1230 GMT. Analysts expect annual headline inflation to rise to 2.7 per cent from 2.4 per cent in May, while core inflation is forecast to climb to 3.0 per cent, up from 2.8 per cent.

Over the weekend, Trump threatened to impose a 30 per cent tariff on goods from Mexico and the European Union starting August 1, after talks with key trading partners failed. On Monday, he also repeated his criticism of Federal Reserve Chair Jerome Powell and said interest rates should be cut to 1 per cent or even lower.

The market currently expects the Fed to deliver 50 basis points in rate cuts by the end of the year, with the first move likely in September. Lower interest rates generally support gold, which does not earn interest and is often seen as a safe investment during economic uncertainty.

In other precious metals, spot silver gained 0.3 per cent to $38.24 an ounce, after reaching its highest level since September 2011 on Monday.

“Silver is gaining from both supply concerns and rising industrial demand. As gold prices have surged over the past 18 months, investors are now looking to silver for better value,” Waterer said.

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