Gold Price News: Gold Edges Higher in Calm Trading

Gold prices were marginally higher on Tuesday, with the market in a somewhat cautious mood after US inflation figures came in largely in line with expectations.

Prices moved as high as $3,265 an ounce on Tuesday, up slightly from around $3,235 an ounce in late trades on Monday.

US inflation in line with market view

US core inflation in April stood at 0.2%, according to figures released on Tuesday, slightly below market expectations of 0.3%, while the year-on-year figure was in line with expectations at 2.8%.

Inflation figures are closely watched in the market as they help determine monetary policy by central banks – a key input for precious metals as non-interest-bearing assets.

Gold’s relative stability on Tuesday comes in the context of a two-week high on May 6 and an all-time high of just over $3,500 an ounce on April 22.

US and China agree to cut tariffs

A degree of calm returned to the financial markets in recent days after US-China trade talks resulted in a climb-down by both countries from the recent extreme tit-for-tat tariffs that had threatened to descend into a global trading freeze.

After levying tariffs of as much as 145% on imported goods from China, the US has agreed to drop these to 30%, according to media reports, while Chinese tariffs on US goods will drop to 10%.

The more workable trade arrangements have halted gold’s recent surge, which came as investors sought safe havens amid worries over the economic impact of the trade war.

Upcoming data/events

Looking ahead, Wednesday will bring speeches by several US Fed officials, which will be watched for signs of upcoming changes to interest rates. Then on Thursday, traders will get an update on monthly industrial production in the Euro Area, UK and US later in the day. Added to these will be the US Core Producer Price Inflation (PPI) figures for April, as well as the weekly initial jobless claims figures for a pulse-check on the US labour market.