Gold is set to extend its gains by rising 0.90% on Wednesday on support from the US dollar and falling US Treasury yields.
The escalating trade war between China and the US remains a driver for investors to turn to safe haven gold, which has strengthened above $2,800.
At 9.30am, gold was at $2,868.51, unchanged since it opened early Thursday in Asian trading.
President Donald Trump’s rhetoric and policies continue to support the yellow metal, which has opened the market towards the next resistance level of $2,900.
Economic data revealed that the labor market remained strong after the ADP report showed that private companies hired more workers than expected.
However, not everything was positive on the data front. Business activity released by S&P Global and the Institute for Supply Management (ISM) showed that the services sector is slowing.
Fed officials signaled that they are still uncertain about the impact of tariffs on inflation. However, Chicago Fed Austan Goolsbee said that ignoring the potential for tariffs would be a mistake.
He added that with inflation likely to rise or stall in 2025, the Fed would be in a difficult position to try to figure out whether inflation would be more worrisome due to the impact of tariffs.
In addition, Trump announced a one-month delay in 25% tariffs on Mexico and Canada and continued 10% tariffs on China.
This will weigh on market sentiment as it looks to global trade.
