Looming tariffs and inflation risks push gold prices slightly higher

Gold prices posted a slight gain of 0.1% on Tuesday, driven by continued uncertainty surrounding US President Donald Trump's tariffs. With new trade duties set to take effect next week, investors are turning to gold as a safe-haven asset amid concerns over a potential economic slowdown and rising inflation.

On Monday, President Trump revealed his plan to introduce import tariffs on automobiles. Even though he clarified that not all of them would take effect right away, with some possibly being deferred past the April 2 deadline. This statement was interpreted by Wall Street as a sign of potential flexibility from the US administration, which has been a major concern for the markets in recent weeks.

The head of the Atlanta Fed, Raphael Bostic, commented that the drop in inflation is likely to unfold more gradually than earlier estimates indicated. Influenced by the impact of US tariff policies, he now forecasts only one rate cut of 0.25% before the end of the year.

Investors are now particularly focused on Friday's Personal Consumption Expenditures (PCE) report, which is the Fed's preferred measure of inflation.

Gold is traditionally seen as a safe haven during times of geopolitical and economic uncertainty. The metal tends to perform well in a lower interest rate environment.