Gold falls as easing Sino-US trade woes dulls safe-haven appeal

[BENGALURU] Gold prices edged lower on Wednesday (May 14) as softening trade tension between the US and China weakened safe-haven demand, while markets eyed another set of inflation data to assess the Federal Reserve’s policy path.

Spot gold fell 0.1 per cent to US$3,246.21 an ounce as at 0029 GMT. US gold futures rose 0.1 per cent to US$3,250.50.

The US will cut the “de minimis” tariff for low-value shipments from China to 30 per cent, per a White House executive order and industry experts, further de-escalating a potentially damaging trade war between the world’s two largest economies.

On Monday, US President Donald Trump said he does not see tariffs on Chinese imports returning to 145 per cent after the 90-day pause, adding that he believes Washington and Beijing will have a deal.

Meanwhile, the United States Department of Labour said the consumer price index increased 0.2 per cent in April, while economists polled by Reuters expected a 0.3 per cent rise after the 0.1 per cent decline in March.

Traders are waiting for the Producer Price Index data, due on Thursday, for cues into the Fed’s rate trajectory.

They are expecting 53 basis points of interest rate cuts this year from September.

Gold, traditionally seen as a hedge against inflation, thrives in a low-rate environment.

On Tuesday, Trump reiterated his call for the Fed to lower rates, saying prices for gas, groceries and “practically everything else” are down.

Spot silver eased 0.3 per cent to US$32.80 an ounce, platinum fell 0.1 per cent to US$987.55 and palladium lost 0.8 per cent to US$949.26. REUTERS