Spot gold was up 0.7% at $2,935.59 an ounce as of 02:32 p.m. ET (1832 GMT). U.S. gold futures settled 0.9% higher at $2,946.80.
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“The concern continues to be that we’re going to have tariffs and that will ultimately potentially cause some inflation,” said Bart Melek, head of commodity strategies at TD Securities.
Data showed that the U.S. consumer price index rose 0.2% last month after accelerating 0.5% in January. However, the improvement is likely temporary against the backdrop of aggressive tariffs on imports that are expected to raise the cost of most goods in the months ahead.
Lower U.S. inflation may give the Fed more leeway to cut interest rates, Melek added.
Last year, the Federal Reserve reduced interest rates by 100 basis points. Financial markets expect the Fed to resume cutting rates in June because of the deteriorating economic outlook, after pausing in January.
Non-yielding gold thrives in a low interest environment and is considered a safe investment during periods of economic and geopolitical turmoil.
The U.S. Producer Price Index (PPI) and weekly jobless claims data due on Thursday are the next data sets on investors’ radar.
On the trade policies front, President Donald Trump’s increased tariffs on all U.S. steel and aluminum imports took effect on Wednesday, stepping up a campaign to reorder global trade in favor of the U.S. and drawing swift retaliation from Europe.
Spot silver added 1.1% to $33.31 an ounce.
Silver should outperform gold in our base case of a modest recovery in manufacturing activity, although a sharper slowdown in U.S. growth is a key risk, UBS said in a note.
Because they feel really good about what’s going on and what the news is and everything they’re seeing and hearing that said, you know, everything that we look at objectively at this point still00:1001:05
Platinum was up 1.3% at $987.40 and palladium rose by 0.2% to $947.50.