Ammon News - Gold gained on Thursday as markets closely tracked developments in U.S. President Donald Trump's tariff plans, which could further escalate a global trade war, while investors awaited crucial U.S. data due later in the day.

Spot gold added 0.6% to $2,922.29 per ounce as of 0528 GMT, moving back towards its record peak of $2,942.70 hit on Tuesday. U.S. gold futures firmed 0.7% to $2,949.30.

Trump said that he would impose reciprocal tariffs as soon as Wednesday evening on every country that charges duties on U.S. imports, in a move that ratchets up fears of a widening global trade war and threatens to accelerate U.S. inflation.

"Gold continues to serve as a key diversifier amid trade uncertainties, as market participants seek to mitigate portfolio volatility," IG market strategist Yeap Jun Rong said.

Gold prices shed more than 1% on Wednesday after data showed U.S. consumer price index increased more than expected in January, reinforcing the Federal Reserve's message that it was in no rush to resume interest rate cuts.

But prices rebounded as trade war uncertainties continued to bolster the safe-haven metal.

"Markets (are) largely shrugging off the hotter-than-expected CPI print. The upcoming PPI data may have a more muted impact on sentiment, given that rate expectations have already adjusted to a prolonged high-for-longer rate environment," Yeap said.

The Producer Price Index (PPI) data is due at 1330 GMT.

Fed Chair Jerome Powell told the House Financial Services Committee that the central bank's battle with rising prices wasn't over and that any further rate cuts would have to wait until it is clear that inflation will return to its 2% target.

Gold is seen as a hedge against inflation, but higher interest rates tarnish the non-yielding bullion's allure.

Spot silver rose 0.4% to $32.33 per ounce, platinum gained 0.4% to $996.79 and palladium firmed 1.4% to $987.20. Reuters