Gold Shines As Safe-Heaven Bets Rise Ahead Of US CPI Data

Gold prices gained on Tuesday as investors zeroed in on bullion as a safe-haven bet amid rising global trade tensions, ahead of crucial U.S. retail inflation data, which could indicate which path the Federal Reserve might take regarding monetary policy.

Concerns over the global economy further rose on Monday as the European Union threatened to impose counter tariffs on U.S. goods, after President Donald Trump unveiled 30% tariffs on the bloc, alongside Mexico, on Saturday if they failed to reach a deal with Washington, D.C., by Aug. 1.

Spot gold prices were up 0.5% at $3,361.23 per ounce, while gold futures advanced 0.3% at $3,370.90 per ounce at 8:47 a.m. GMT. Retail sentiment on Stocktwits for the SPDR Gold Shares ETF (GLD) remained in ‘bearish’ territory heading into Tuesday’s stock market open.

According to a Reuters report, KCM Trade Chief Market Analyst Tim Waterer said, “Gold has shown in the past that it is an asset of choice when tariff tensions are ratcheted up, and the precious metal's move towards $3,350 is evidence of this pattern playing out again.”

However, he reportedly warned that a pullback in the U.S. dollar or treasury yields might be required for gold to rally towards $3,400, in the absence of heightened geopolitical events. The dollar index slightly edged lower on Tuesday.

Investors will also closely watch the U.S. inflation data, due to be released later on Tuesday. According to CME’s FedWatch tool, a majority of traders expect the U.S. central bank to maintain its benchmark interest rates at present levels as policymakers seek more clarity on tariffs. Trump once again attacked Fed Chair Jerome Powell for not lowering benchmark interest rates.

The SPDR Gold Shares ETF has risen over 26% compared with over 6% gains in the SPDR S&P 500 ETF.

Also See: Oil Prices Decline After Trump’s 50-Day Deadline For Russia To End Ukraine War Alleviates Supply Fears

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