By Anjana Anil
(Reuters) – Gold inched higher on Monday, supported by a weaker dollar and safe-haven flows amid fears of an escalating global trade war, while investors awaited further signals to gauge the Federal Reserve’s interest rate stance.
Spot gold gained 0.1% to $2,914.00 an ounce as of 0701 GMT, while U.S.
gold futures firmed 0.2% to$2,920.10.
The dollar index hovered near the four-month low hit last week, making greenback-priced gold less expensive for overseas buyers.
“There are mounting downside risks to growth, while U.S.
foreign policy is also a source of uncertainty, boosting the appeal for gold,” Capital.com’s financial market analyst Kyle Rodda said.
“I think $3,000 is a level we’ll breach soon, probably in the next couple of months at the latest.”
U.S.
President Donald Trump on Sunday declined to predict whether the U.S. could face a recession amid stock market concerns about his tariff actions on Mexico, Canada and China over fentanyl.
Seesaw tariff announcements have unnerved Wall Street as investors said the Trump administration’s flip-flopping moves to roll back levies on trading partners are causing confusion rather than bringing relief.
Trump imposed new 25% tariffs on imports from Mexico and Canada last Tuesday, along with fresh duties on Chinese goods.
He later exempted many imports from Mexico and some from Canada from the tariffs for a month, creating uncertainty in the markets and fanning worries of U.S.
inflation and growth slowdown.
Tariffs have been a key concern for investors, with many believing that they can hurt economic growth and be inflationary.
Investors now await the U.S. Consumer Price Index (CPI) data due on Wednesday and Producer Price Index (PPI) data expected on Thursday.
Gold is considered a hedge against political risks and inflation, but higher interest rates dull the non-yielding asset’s allure.
Spot silver eased 0.2% to $32.45 an ounce, while platinum held steady at $963.37.
Palladium was also unchanged at $948.64.
(Reporting by Anjana Anil in Bengaluru; Editing by Subhranshu Sahu, Sherry Jacob-Phillips, Janane Venkatraman and Sumana Nandy)
