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• Gold price gains momentum to a record high around $3,190 in Friday’s early Asian session. 
• An escalation of the US-China trade underpins the Gold price. 
• Pared-back Fed rate cut bets might help limit the XAU/USD’s losses. 

The Gold price (XAU/USD) surges to near an all-time high around $3,190 during the early Asian session on Friday. The weakening of the US Dollar (USD) and escalating trade war between the United States (US) and China provide some support to the precious metal, a traditional safe haven asset. 

Data released by the US Bureau of Labor Statistics (BLS) on Thursday revealed that US consumer prices unexpectedly fell in March, but inflation risks are tilted to the upside after US President Donald Trump doubled down on China tariffs. The US CPI inflation eased to 2.4% YoY in March from 2.8% in February. This reading came in below the market expectation of 2.6%.

The core CPI, which excludes volatile food and energy prices, increased 2.8% YoY in March, compared to a rise of 3.1% seen in February and came in below the consensus of 3.0%. On a monthly basis, the headline CPI declined 0.1%, while the core CPI rose 0.1%. 

Trump said on Wednesday he would temporarily lower duties on dozens of countries. However, Trump also raised tariffs on China to 125%, effective immediately, after Beijing announced plans to retaliate with 84% duties. The worries over the global economy and the renewed trade tensions between the world’s two biggest economies keep investors in safe-haven assets, supporting the Gold price. 

On the other hand, pared-back Federal Reserve (Fed) rate cut bets that can strengthen the Greenback and weigh on the USD-denominated commodity price. Traders are now expecting the Fed will resume cutting interest rates in June and probably reduce its policy rate by a full percentage point by the end of the year.

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