Gold climbed as investors assessed the outlook for the US economy and the Federal Reserve interest-rate path following the latest inflation print and the start of President Donald Trump’s metal tariffs.
US consumer prices rose at the slowest pace in four months in February, welcome news for American households who remain apprehensive about the potential for tariffs to drive costs higher.
Trump’s 25% tariffs on steel and aluminum imports came into force Wednesday, triggering concern across export-reliant Asia and immediate reprisals from the European Union and Canada.
“I read the lower-than-expected CPI data as being favorable for commodities, and the precious sector in particular. The market will interpret this as allowing the Fed to ease sooner rather than later,” said Bart Melek, global head of commodities strategy at TD Securities.
“As tariffs hit, however, price pressures may well reemerge.” he added. Lower rates typically benefit bullion as it pays no interest.
Bullion has risen 11% this year, helped in part by haven demand emanating from uncertainty surrounding Trump’s tariff measures.
Spot gold was up 0.4% at $2,927.27 an ounce at 11:43 a.m. in New York. The Bloomberg Dollar Spot Index was up 0.1%. Silver, platinum and palladium rose.
