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At 09:21 GMT, XAU/USD is trading $3072.16, up $15.55 or +0.51%.
Tariffs and Inflation Expectations Push Gold Above $3,000
The broader market is beginning to price in the inflationary impact of tariffs. Fed officials are divided on the effect—Boston Fed President Susan Collins expects a short-term inflation spike, while St. Louis Fed’s Alberto Musalem warns it may persist. His team estimates the tariffs could add over 1 percentage point to inflation.
Today’s PCE data—expected to show a 0.4% monthly rise in core inflation—may not fully capture the inflation that’s still to come. That gives gold added momentum as inflation hedging picks up. Core inflation is forecast to edge higher to 2.7% year-over-year, reinforcing the Fed’s cautious stance and reducing the likelihood of near-term rate cuts.
Fed Policy Uncertainty Adds Fuel to Bullish Gold Setup
Gold thrives in periods of policy uncertainty and weakening growth expectations. Business investment and hiring have reportedly slowed under current U.S. policy conditions. Richmond Fed’s Thomas Barkin compared the environment to driving with “zero visibility,” and consumer sentiment is falling as inflation fears rise.
Despite the current “moderately restrictive” stance from the Fed, traders see little reason for immediate easing, especially with February’s data lagging behind recent developments. That puts real rates and inflation expectations squarely in focus for gold.
Gold Prices Projections: Bullish Bias Intact Above $3,000
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