Gold gains above $5,150 as US tariff uncertainty drive demand, eyes on US-Iran talks
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Gold posts modest gains around $5,165 in Thursday’s early Asian session.
Traders will closely monitor the US-Iran nuclear talks on Thursday in Geneva.
The US trade representative said US tariffs could rise to 15% or more after the Supreme Court ruling.
Gold price (XAU/USD) trades with mild gains near $5,165 during the early Asian session on Thursday. The rally of the precious metal is bolstered by escalating geopolitical tensions between the United States (US) and Iran and ongoing uncertainty regarding US tariff policies. All eyes will be on the US Producer Price Index (PPI) report for January, which is due on Friday.
US President Donald Trump last week threatened to attack Iran if negotiations fail. Meanwhile, tens of thousands of US service members are at risk after Iran said that all US military bases in the Mideast would be considered legitimate targets. Fears that an attack could spiral into a new regional war could boost a traditional safe-haven asset such as Gold.
Traders will closely monitor the developments surrounding the US-Iran talks. Two countries are expected to meet for a further round of talks in Geneva on Thursday.
The US trade representative, Jamieson Greer, said on Wednesday that the US tariff rate for some countries will go up to 15% or higher from the newly imposed 10% without naming any specific trading partners or other details.
Trump suffered a defeat at the hands of the US Supreme Court last week, which struck down his sweeping “liberation day” tariffs imposed last year. But in response, Donald Trump announced imposing a 10% global tariff and raising the level to 15%. US tariff uncertainty might contribute to the yellow metal’s upside.
The attention will shift to the US January PPI data on Friday, as it could offer more clues about the US interest rate path. The headline PPI is expected to show an increase of 2.6% YoY in January, while the core PPI is projected to show a rise of 3.0% during the same period. Any signs of hotter inflation in the US could lift the US Dollar (USD) and weigh on the USD-denominated commodity price in the near term.
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