Gold nudges higher as focus turns to US tariff negotiations

[BENGALURU] Gold prices edged higher on Wednesday (Jul 16), as investors digested economic data showing an increase in US consumer prices last month and awaited further clarity on US President Donald Trump’s trade policy.

Spot gold was up 0.3 per cent at US$3,330.99 per ounce, as at 0052 GMT. US gold futures were steady at US$3,337.70.

US consumer prices increased in June by the most in five months amid higher costs for some goods, suggesting tariffs were starting to have an impact on inflation and potentially keeping the Federal Reserve on the sidelines until September.

Following the data, Trump said that consumer prices were low and the US Fed should bring down interest rates now.

The US central bank will probably need to leave interest rates where they are for a while longer to ensure inflation stays low in the face of upward pressure from the Trump administration’s tariffs, Dallas Fed Bank President Lorie Logan said.

Gold, often considered as a safe-haven asset during times of economic uncertainties, tends to do well in a low-interest-rate environment.

Focus now shifts to US Producer Price Index data due at 1230 GMT on Wednesday for more cues.

Trump on Saturday threatened to impose a 30 per cent tariff on imports from Mexico and the European Union starting on Aug 1. However, Trump said on Monday he was open to further negotiations.

Keeping gold gains in check, the US dollar and benchmark US 10-year Treasury yields held near multi-week highs.

Spot silver gained 0.2 per cent to US$37.81 per ounce after hitting its highest level since September 2011 on Monday. Platinum eased 0.2 per cent to US$1,369.42 and palladium slipped 0.6 per cent to US$1,198.62. REUTERS