Gold rises as Fed warns of economic uncertainty; Sino-US trade talks eyed

Gold prices climbed on Thursday after the Federal Reserve warned of rising inflation and labor market risks fuelling economic uncertainty, while investors awaited the U.S.-China trade talks.

FUNDAMENTALS

* Spot gold rose 0.6% to $3,384.99 an ounce as of 0030 GMT. U.S. gold futures were steady at $3,392.00.

* The Fed held interest rates steady on Wednesday, but said risks of higher inflation and unemployment had risen, further clouding the U.S. economic outlook, as its policymakers grapple with the impact of President Donald Trump’s tariffs.

* Fed Chair Jerome Powell said it isn’t clear if the economy will continue its steady growth or wilt under mounting uncertainty and a possible spike in inflation. * On Wednesday, Trump suggested China initiated the upcoming senior-level trade talks between the two countries and said he was not willing to cut import tariffs on Chinese goods to get Beijing to the negotiating table.
* The non-yielding bullion, a safeguard against political and financial turmoils, thrives in a low-interest-rate environment.
* On the geopolitical front, India struck Pakistan and Pakistan Kashmir on Wednesday over the tourist killings in Kashmir last month. Pakistan vowed to retaliate and said it shot down five Indian aircraft in the worst clash in more than two decades between the nuclear-armed neighbours.
* Spot silver was steady at $32.46 an ounce, platinum gained 0.5% to $978.56 and palladium lost 0.7% to $965.78. DATA/EVENTS (GMT) 0600 Germany Industrial Output MM, Production YY SA Mar 0600 UK Halifax House Prices MM, YY Apr 1102 UK BOE Bank Rate May 1230 US Initial Jobless Clm 3 May, w/e 1430 US EIA-Nat Gas Chg Bcf, Nat Gas-EIA Implied Flow 2 May.