Gold rises on lower dollar, US-China trade uncertainty

Gold prices rose on Wednesday, supported by a lower dollar and uncertainty over the finalisation of a U.S.-China trade agreement, as markets awaited key U.S. inflation data for direction.

FUNDAMENTALS

* Spot gold rose 0.4% to $3,334.29 an ounce, as of 0041 GMT. U.S. gold futures also rose 0.4% to $3,355.30.

* U.S. and Chinese officials agreed on a framework to put their trade truce back on track and resolve China’s export restrictions on rare earth minerals and magnets, U.S. Commerce Secretary Howard Lutnick said on Tuesday at the conclusion of two days of intense negotiations in London.

* Meanwhile, Lutnick said the U.S. team would take the framework back to President Donald Trump to get his approval before implementing the agreement. * The U.S. and China had imposed tit-for-tat tariffs in April, sparking a trade war, but following talks in Geneva last month both nations agreed to cut tariffs back from triple-digit levels.
* The U.S. dollar index was down 0.2%, making gold less expensive for overseas buyers.
* The World Bank on Tuesday slashed its global growth forecast for 2025 by four-tenths of a percentage point to 2.3%, saying that higher tariffs and heightened uncertainty posed a “significant headwind” for nearly all economies.
* The U.S. Federal Reserve will keep interest rates on hold for at least another couple of months, according to most economists polled by Reuters, as risks linger that inflation may resurge due to Trump’s tariff policies.

* Investors are now awaiting the U.S. consumer price index (CPI) report due at 1230 GMT for more cues on Fed’s policy path.

* Economists polled by Reuters expect the U.S. CPI in May to rise by 0.3% month-over-month and 2.5% year-over-year.

* Elsewhere, spot silver was unchanged at $36.59 per ounce, platinum fell 0.2% to $1,218.78, while palladium was down 0.3% to $1,057.50. DATA/EVENTS (GMT) 1230 US Core CPI MM, SA; YY, NSA May 1230 US CPI MM, SA; YY, NSA May 1230 US CPI Wage earner May.