Gold inched higher on Tuesday, ahead of the release of US inflation data later in the day that could shed more light on the Federal Reserve’s interest rate path.
Spot gold was up 0.1 percent at $3,346.94 per ounce, as of 0151 GMT. US gold futures were flat at $3,355.60.
“Gold has shown in the past that it is an asset of choice when tariff tensions are ratcheted up, and the precious metal’s move towards $3,350 is evidence of this pattern playing out again,” KCM Trade Chief Market Analyst Tim Waterer said.
“However, higher treasury yields and USD appreciation have created headwinds…For gold to make further progress towards $3,400 a pullback in the USD or treasury yields may be required in the absence of heightened geopolitical events.”
US President Donald Trump on Saturday threatened to impose a 30 percent tariff on imports from Mexico and the European Union starting on August 1, after weeks of negotiations with the major US trading partners failed to reach a trade deal.
Traders’ focus now shifts to US consumer price data for June, due at 1230 GMT on Tuesday.
Economists polled by Reuters expect headline inflation to increase to 2.7 percent on an annual basis, up from 2.4 percent in the prior month. Core inflation is expected to rise to 3.0 percent, from 2.8 percent.
Trump on Monday renewed his attacks on Fed Chair Jerome Powell, saying interest rates should be at 1 percent or lower. Markets are pricing in 50 basis points of rate cuts by year-end, with the first reduction expected in September.
