(Bloomberg) — Gold fluctuated as traders weighed the US Federal Reserve’s interest rate path after a modest rise in the cost of US goods tempered concerns about tariff-driven price pressures.
Underlying inflation accelerated in July by the most since the start of the year, though goods inflation was more subdued, according to Bureau of Labor Statistics data released Tuesday.
Most Read from Bloomberg
Swap traders still are betting the US central bank will lower borrowing costs at its September meeting, especially given a softening labor market. Gold, which pays no interest, typically benefits in a lower rate environment.
The precious metal earlier climbed as much as 0.5% as the dollar pushed lower after Fox Business reported President Donald Trump’s pick to lead the Bureau of Labor Statistics suggested suspending the monthly jobs report prior to his nomination.
Traders also are on the lookout for clarification on whether gold imports would be subject to tariffs. On Monday, Trump said without elaborating there would not be a levy. But on Friday, Customs and Border Protection stunned traders by saying gold bars would be subject to duties.
“President Trump’s statement is an encouraging signal for trade stability,” Christoph Wild, president of the Swiss Association of Manufacturers and Traders in Precious Metals, said in a written statement. “However, only a formal and binding decision will provide the certainty the gold sector and its partners require.”
Prices for gold futures in New York and spot gold in London continued to converge after Trump’s comments. December gold futures on New York’s Comex held near $3,400 an ounce Tuesday, while spot gold traded near $3,350 an ounce. Adjusting for the different delivery dates, the two markets are almost level.
Gold has climbed more than 27% this year, with the bulk of those gains occurring in the first four months. It has been supported by geopolitical and trade tensions that have spurred haven demand, along with strong central bank purchases.
Spot gold rose 0.2% to $3,348.85 an ounce as of 1:13 p.m. in New York. The Bloomberg Dollar Spot Index fell 0.4%. Silver and platinum advanced, while palladium slipped.
Comex copper rose 1.9% to settle at $4.5255 a pound. The red metal traded on the London Metal Exchange gained 1.1% to settle at $9,840.50 a ton at 5:51 local time. Most other LME metals were higher.