Gold steady as US inflation data, tariff concerns loom

Onome Amuge

Gold prices remained steady in early Asian trading on Wednesday, with market participants exercising caution ahead of the release of a highly anticipated inflation report. 

The yellow metal, traditionally seen as a safe-haven asset, continued to garner support due to market volatility driven by uncertainty surrounding President Donald Trump’s fickle tariff policies.

Spot gold held its ground at $2,911.17 per ounce, as market participants adopted a more defensive position ahead of the inflation report release. This sentiment was reflected in the April gold futures, which also remained largely unchanged at $2,921.24 an ounce.

Markets remained on edge as investors watched for the release of the U.S. Consumer Price Index (CPI) data, a key gauge of inflation that could offer critical insights into the Federal Reserve’s monetary policy path.

The Fed, tasked with maintaining price stability and promoting sustainable economic growth, has indicated that interest rate decisions will be guided by economic data, particularly inflation. 

Lower interest rates have historically favoured gold, as they reduce the opportunity cost of holding non-yielding assets, leading to increased demand for the precious metal and, consequently, higher gold prices.

Federal Reserve policymakers have signaled that a rate cut in the near future is unlikely, citing a cautious approach towards managing inflation risks, particularly in the context of unpredictable shifts in trade policies and the potential inflationary impacts of the Trump administration’s volatile tariff decisions.

The precious metals complex displayed a mostly weak performance, with platinum futures edging up by 0.2 percent, closing the session at $988.05 per ounce. Silver futures mirrored the marginal gains, rising by 0.3 percent to $33.240 per ounce.

Copper prices saw an upward trajectory on Wednesday, buoyed by a reversal in President Trump’s recent decision to double tariffs on imported steel and aluminum, leading to a sense of relief among investors.

The red metal, often seen as a bellwether for economic health, was further strengthened by optimism surrounding the conclusion of the National People’s Congress annual session in China.

Benchmark copper futures prices on the London Metal Exchange (LME) climbed by 0.7 percent, with the contract trading at $9,722.80 a tonne.