Gold prices are seen maintaining momentum near $5,200 as US tariff uncertainty drives safe-haven demand. Traders await the release of the US January Producer Price Index (PPI) report due late Friday.
At 8.50 am, gold prices were at $5,173, down 0.22% since it opened early Friday in Asian trading.
US President Donald Trump announced that his administration would impose a blanket 15% tariff on imports after the Supreme Court's decision to overturn the previous reciprocal tariff regime.
ComScore Observer
The move marks a major shift in the direction of US trade policy.
US Trade Representative Jamieson Greer also stated that the levy rate could potentially be increased to 15% or higher on many countries in the coming days.
Uncertainty over the implementation and actual scope of these tariffs has sparked concerns among global investors.
The uncertainty over the US trade policy indirectly supported gold prices in the previous session. The yellow metal is seen as a safe haven asset as markets grapple with risks and policy uncertainty.
In a separate development, tensions between the United States and Iran appear to be easing. Omani Foreign Minister Badr Albusaidi said the US and Iran will resume nuclear talks next week after making significant progress in talks in Switzerland.
The talks are scheduled to resume in Vienna at a technical level after a series of preliminary discussions.
Markets are closely monitoring the progress of these talks as any further progress could reduce global geopolitical risks, thus influencing gold's movements.
The market's next focus will be on the US Personal Expenditure Price Index (PPI) report due on Friday. This data is important as a key indicator of the direction of the Fed's interest rate.
Economists expect PPI to rise moderately by 0.3% month-on-month in January, compared to 0.5% in December. On an annual basis, the reading is projected to ease to 2.6% from 3.0% previously.
A stronger-than-expected reading in inflation data could reinforce expectations that US interest rates will remain high for a longer period. This situation usually puts pressure on gold because the precious metal does not offer interest returns.
