Gold prices lifted for the third consecutive session on Thursday, approaching record highs of US$2,956 per ounce, as traders assessed the impact of cooling inflation in the United States and escalating global trade tensions.
By 4:05 pm AEDT (5:05 am GMT) spot gold was up $11.37 or 0.4% to US$2,944.92 per ounce.
Investors remain cautious as tit-for-tat tariffs between the U.S., Canada, China, and the European Union (E.U.) escalate, raising uncertainty about the global economic outlook.
ANZ analysts noted in a client report: "Fears of a broader global trade war were also supportive for safe haven assets such as gold. Canada struck back at Trump’s tariffs, setting a 25% levy on about C$30 billion of U.S.-made goods. The response was coordinated with the EU, which targeted about €26 billion of American goods in retaliation."
With the U.S. dollar and Treasury yields facing renewed pressure, gold continues to attract investors seeking stability amid economic and geopolitical risks.
On Wednesday, U.S. inflation data came in softer than expected, reinforcing expectations that the Federal Reserve will continue its rate-cutting cycle.
The annual headline Consumer Price Index (CPI) rose 2.8% in February, down from 3% in January and below the 2.9% forecast. Monthly CPI and core CPI both increased 0.2%.
While this initially eased concerns of an economic slowdown, traders quickly realised that the February inflation data did not fully reflect the impact of Trump’s latest tariff measures, reviving fears of slower growth and a weaker dollar.
A lower interest rate environment typically benefits non-yielding assets like gold, adding further momentum to its rally.
Investors now await the U.S. Producer Price Index (PPI) data, due later in Thursday's session. A softer-than-expected reading could trigger further dollar weakness, potentially boosting gold prices further.
