Gold prices rose in European trade on Thursday on track for the second straight profit, thus approaching a record high on strong haven demand as the US-China trade war deteriorated.
As the odds of a Fed 0.25% interest rate cut in May faded, investors are now waiting for important US inflation data later today to gather more clues.
Prices
Gold prices rose 1.65% today to $3132 an ounce, with a session-low at $3071.
On Wednesday, gold rose 3.35%, the first profit in five days, and the largest since October 2023 on concerns about the US-China trade war.
The precious metal hit a record high on April 3 at $3167 an ounce before entering a correction in the short term.
Erupting Trade War
US President Donald Trump escalated the devastating trade war with China by announcing 125% tariffs on Chinese products.
The tariffs will be immediate and are a response to China’s disrespect to global markets as Trump described it.
Simultaneously, Trump announced a 90-day hold on tariffs for most other countries .
The Chinese government announced fresh retaliatory 84% tariffs on US products, deepening the trade war.
US Rates
Separately, the Federal Open Market Committee’s meeting minutes showed all members unanimously voted in favor of maintaining interest rates unchanged in March.
The minutes showed concerns about weaker growth due to higher tariffs, but increased spending in some economies reduced such concerns.
Policymakers believe that high inflation could be more resistant than expected, with mounting market uncertainty due to weaker consumer spending and high tariffs.
US Inflation Data
Later today, US consumer prices will be released, expected to show a slowdown to 2.5% in March from a 2.8% rise in February, while core prices are expected up 3.0% last month.
SPDR
Gold holdings at the SPDR Gold Trust rose 11.17 tons yesterday to a total of 937.09 tons, the highest since June 2023.
