As investors awaited inflation data to evaluate the Federal Reserve’s policy course amid brewing trade tensions and concerns of an economic slowdown, gold climbed on Tuesday despite weak dollar and Treasury yields.
As of 0501 GMT, spot gold (GOLD) increased 0.3% to $2,898.27 an ounce, while U.S. gold futures (GOLD) firmed 0.1 to $2,902.50.
Bullion became more affordable for foreign purchasers as the dollar index DXY remained close to a four-month low reached last week, while benchmark 10-year U.S. Treasury rates, or US10Y, declined.
“Gold is gaining some support since Treasury rates and the US dollar are declining. “The path of least resistance favours the upside, and the overall uptrend is still in place,” stated Ilya Spivak, Tastylive’s head of global macro.
“Over the last four weeks, prices have been consistent, ranging from around 2,830 to 2,960. To determine that a long-term directional movement is starting up again, we would need to see a compelling break above or below these parameters.
In an interview with Fox News on Sunday, U.S. President Donald Trump refrained from predicting whether his tariffs will cause a U.S. recession and lower global equities.
In addition to new levies on Chinese goods, Trump announced 25% tariffs on imports from Mexico and Canada last Tuesday. However, he later exempted many Mexican and Canadian imports from these tariffs for a month, which caused market turbulence and fuelled concerns about U.S. inflation and a slowdown in development.
In order to assess the Fed’s interest rate stance, investors are now awaiting U.S. Consumer Price Index (CPI) data, which is due on Wednesday.
Although gold is regarded as a hedge against inflation and political dangers, its appeal may be diminished if rising prices pressure the Fed to maintain higher interest rates.
Palladium XPDUSD1! dropped 0.3% to $940.47, platinum PL1! was stable at $957.89, while spot silver XAGUSD1! increased 0.3% to $32.19 an ounce.