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Gold Prices Rise Amid Weaker Dollar and U.S.-China Trade Deal Uncertainty

Golden bars and coins stacked on dark background, symbolizing rise in gold prices due to market factors.

Gold prices rose on Wednesday due to a weaker dollar and uncertainty regarding a U.S.-China trade deal. Spot gold increased by 0.4% as traders await significant U.S. inflation data. The World Bank lowered its global growth forecast due to tariff impacts, and investors anticipate CPI reports that could influence Federal Reserve decisions.

Gold prices experienced an uptick on Wednesday, driven by a weaker dollar and the continuing uncertainty surrounding the U.S.-China trade deal. As traders waited for crucial U.S. inflation data to provide guidance, spot gold increased by 0.4% to $3,334.29 per ounce at 0041 GMT, while U.S. gold futures also inched up by the same margin to $3,355.30.

On Tuesday, U.S. Commerce Secretary Howard Lutnick announced that U.S. and Chinese officials had reached a tentative framework aimed at revitalizing their trade negotiations. This framework is intended to address China’s restrictions on the export of rare earth minerals and magnets. However, implementation hinges on President Donald Trump’s approval of this outlined agreement.

Both countries had previously engaged in intensifying tariffs against each other starting in April, which escalated into a trade war. Yet, following discussions in Geneva last month, both the U.S. and China have tentatively agreed to reduce those high tariffs. The recent decline in the U.S. dollar index, down 0.2%, has also made gold relatively more affordable for international buyers, enhancing demand.

In a broader context, the World Bank has recently revised its global growth forecast for 2025 downwards by four-tenths of a percentage point, adjusting it to 2.3%. The institution cited that rising tariffs and ongoing uncertainties could pose significant challenges for economies worldwide.

Most economists surveyed by Reuters suggest the Federal Reserve will maintain current interest rates for at least the next couple of months. They expressed concerns about a potential resurgence in inflation, particularly linked to the implications of Trump’s tariff strategy. Investors are now keenly anticipating the release of the U.S. consumer price index (CPI) report, scheduled for 1230 GMT, which may shed light on future Fed policies.

Moreover, economists predicted a 0.3% month-over-month increase in U.S. CPI for May, with an expected year-over-year rise to 2.5%. In other market activities, spot silver remained stable at $36.59 per ounce while platinum and palladium saw slight declines, reaching $1,218.78 and $1,057.50 per ounce, respectively.

Finally, important U.S. data releases are set for later, including the US Core CPI and Wage Earner CPI reports, all due at 1230 GMT, which could influence market dynamics significantly.

In summary, gold prices increased due to a softer dollar and ongoing U.S.-China trade negotiations. Key inflation data is forthcoming, which may further impact market sentiment and Federal Reserve policy. Meanwhile, the economic outlook remains cautious following updates from the World Bank. Investors will be closely watching the upcoming CPI reports for more detailed insights on inflation trends and fed policies going forward.

Original Source: www.tradingview.com

Nia Simpson is a dedicated and insightful journalist specializing in health and wellness reporting. With a degree from Howard University, Nia has contributed to various leading health magazines and online platforms. Her ability to combine empirical research with personal narratives has enabled her to create content that informs and empowers her readers. Nia’s commitment to highlighting often-overlooked health issues has earned her commendations in the field.

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