Gold Inches Higher as Trump’s Tariff Probe Fuels Safe-Haven Demand

Gold prices edged higher on Wednesday after hitting a one-week low in the previous session, as renewed tariff concerns under U.S. President Donald Trump's trade policies dampened risk appetite and boosted safe-haven demand.

Spot gold rose 0.1% to $2,918.01 an ounce as of 0237 GMT, recovering from a more than 2% decline on Tuesday. U.S. gold futures climbed 0.5% to $2,932.50.

Trump escalated trade tensions on Tuesday by ordering an investigation into potential new tariffs on copper imports, aiming to bolster domestic production of a metal crucial for electric vehicles, military hardware, the power grid, and consumer goods.

"Trump tariff concerns, which are causing this rather lackluster state of confidence in the U.S. economy from a consumer side of the mindset, are supporting gold," said Kelvin Wong, senior market analyst, Asia Pacific, at OANDA.

Adding to market jitters, U.S. consumer confidence plummeted at its sharpest pace in three and a half years in February, while 12-month inflation expectations surged.

"It's hard to make significant monetary policy changes amid such uncertainty," said Richmond Federal Reserve President Tom Barkin on Tuesday.

While persistent inflation pressures could push the Federal Reserve to keep interest rates elevated—dampening gold's appeal—the metal has gained about 11% so far this year, with fears of a global trade war supporting its rally.

Investors now await the U.S. Personal Consumption Expenditures (PCE) report, the Fed's preferred inflation gauge, due on Friday.

"If the numbers confirm the underlying fear that inflation is ticking higher again, Fed rate-cutting expectations could be further reined in," said Tim Waterer, chief market analyst at KCM Trade.

Among other precious metals, spot silver remained steady at $31.74 an ounce, platinum fell 0.3% to $964.00, and palladium gained 0.3% to $930.73.

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