Gold Price Nears $3,350 as Safe-Haven Demand Rises Before US CPI Data

Gold Price Nears $3,350 as Safe-Haven Demand Rises Before US CPI Data

The Gold price (XAU/USD) advanced to near $3,350 during early trading in Asia on Tuesday, driven by renewed safe-haven demand following escalating geopolitical tensions and ahead of a key US inflation release.

Trump Threatens 100% Tariffs on Russia

Late Monday, US President Donald Trump threatened to impose 100% secondary tariffs on Russia unless President Vladimir Putin agrees to a ceasefire deal in Ukraine within 50 days. While the exact structure of the tariffs remains unclear, the threat has rattled markets and increased demand for safe-haven assets like Gold.

This move adds further geopolitical uncertainty and could continue to support precious metal prices in the short term.

US CPI Inflation Data in Focus

Markets are now shifting attention to the US Consumer Price Index (CPI) report for June, set to be released later today. The inflation print is expected to influence Federal Reserve policy expectations.

Federal Reserve Chair Jerome Powell recently noted that inflation could increase in the coming months due to new tariffs, which may delay any immediate interest rate cuts. While this cautious stance might limit Gold’s upside, inflationary concerns typically reinforce Gold’s value as an inflation hedge.

Fed Policy Outlook Remains a Drag on Gold

Despite geopolitical tailwinds, Gold's rally may be tempered by the Fed’s hawkish pause, as higher interest rates reduce the appeal of non-yielding assets like Gold.

Outlook

If the CPI data surprises to the upside, Gold may see increased volatility as markets reprice Fed expectations. However, in the context of escalating geopolitical risks, the uptrend for XAU/USD could remain intact.

Related Content on Tredu.com:

• What Drives Gold Prices in 2025?
• How Geopolitical Tensions Influence Safe-Haven Assets
• Understanding CPI and Its Impact on Precious Metals