Gold prices saw an uptick in Asian trading on Thursday, driven by a softer-than-expected inflation report in the U.S. that fueled expectations of interest rate cuts. Meanwhile, fresh tariff threats from President Donald Trump further boosted the appeal of gold as a safe-haven asset.
Spot gold rose 0.4% to $2,945.18 per ounce, while April gold futures gained 0.2%, reaching $2,953.62 an ounce by 00:56 ET (04:56 GMT).
Cooling Inflation Data Supports Rate-Cut Speculation
U.S. inflation data for February showed a modest 0.2% increase in the Consumer Price Index (CPI), resulting in a year-over-year rise of 2.8%. This was slightly below the expected 2.9% and a decline from January’s 3.0% increase.
The cooling inflation has reinforced expectations that the Federal Reserve may consider reducing interest rates in the near future, with markets pricing in three rate cuts this year, starting as early as June, according to the Fedwatch tool. Lower interest rates typically make non-yielding assets like gold more attractive to investors by reducing the opportunity cost of holding them.
The Fed is set to meet on March 18-19 to decide on interest rates, with market participants closely awaiting the outcome.
Trade Tensions Fuel Safe-Haven Demand for Gold
Uncertainties surrounding U.S. trade policies have also bolstered gold’s status as a safe-haven investment. President Trump threatened on Wednesday to impose additional tariffs on European Union (EU) goods if the EU moves forward with its planned counter-tariffs on U.S. products.
This escalation follows the U.S. imposition of a 25% tariff on steel and aluminum imports, a move that has strained relations with key trade partners. In retaliation, Canada has placed 25% tariffs on $21 billion worth of U.S. imports, further heightening trade tensions.
Despite a largely unchanged U.S. Dollar Index in Asian trading, the dollar remains near a four-month low, reflecting growing recession concerns.
Other Precious Metals Struggle
While gold prices rose, other precious metals saw declines. Platinum futures fell 0.7% to $990.10 per ounce, and silver futures dropped 0.4%, settling at $33.593 per ounce.
Copper Prices Decline Amid Potential Tariffs
Copper prices also dipped on Thursday as the Trump administration moved to add copper to its list of trade protections. President Trump recently signed an executive order launching an investigation into whether copper imports pose a national security risk, potentially leading to new tariffs.
Benchmark copper futures on the London Metal Exchange declined 0.2%, trading at $9,763.80 per ton, while April copper futures lost 0.2%, reaching $4.8340 per pound.
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