Gold prices edged higher during Tuesday's trade as market participants await the release of key U.S. inflation figures.
By 4:25 pm AEDT (5:25 am GMT) spot gold was trading $8.53 or 0.3% higher at US$2,671.39 per ounce.
The broader market is focused on critical U.S. inflation data, with producer price index (PPI) figures expected to set the tone for the consumer price index (CPI) release on Wednesday (Thursday AEDT), which markets regard as a key determinant of future Federal Reserve policy.
Consensus forecasts suggest the annual PPI inflation rate will rise to 3.4% in December from 3% in November, with core PPI expected to increase to 3.7% from 3.4%.
Following a strong U.S. nonfarm payrolls report last Friday, traders have reduced their expectations for Federal Reserve rate cuts this year, now anticipating only one reduction compared to two previously projected.
Investors also anticipate further stimulus from Beijing, especially following recent measures to stabilise the Yuan and promote economic growth.
Meanwhile, a Bloomberg report citing sources close to Trump’s advisors suggested the possibility of gradual tariff implementation, increasing by 2% to 5% monthly. Such measures, if enacted, could amplify inflationary pressures and bolster Gold’s appeal as an inflation hedge.