March 12 (Reuters) - Safe-haven gold rose on Wednesday, aided by tariff uncertainty and a cooler inflation report that keep bets for a U.S. rate cut intact.
Spot gold was up 0.7% at $2,934.93 an ounce as of 1610 GMT. U.S. gold futures rose 0.7% to $2,942.50.
"The concern continues to be that we're going to have tariffs and that will ultimately potentially cause some inflation," said Bart Melek, head of commodity strategies at TD Securities.
Data showed that U.S. consumer price index rose 0.2% last month after accelerating 0.5% in January. However, the improvement is likely temporary against the backdrop of aggressive tariffs on imports that are expected to raise the cost of most goods in the months ahead.
Lower U.S. inflation may give the Fed more leeway to cut interest rates, Melek added.
Last year, the Federal Reserve reduced interest rates by 100 basis points. Financial markets expect the Fed to resume cutting rates in June because of the deteriorating economic outlook, after pausing in January. FEDWATCH
Non-yielding gold thrives in a low interest environment and is considered a safe investment during periods of economic and geopolitical turmoil.
The U.S. Producer Price Index (PPI) and weekly jobless claims data due on Thursday are the next data sets on investors' radar.
On the trade policies front, President Donald Trump's increased tariffs on all U.S. steel and aluminum imports took effect on Wednesday, stepping up a campaign to reorder global trade in favor of the U.S. and drawing swift retaliation from Europe.
Spot silver added 0.9% to $33.22 an ounce.
Silver should outperform gold in our base case of a modest recovery in manufacturing activity, although a sharper slowdown in U.S. growth is a key risk, UBS said in a note.
Platinum was up 1.1% at $986.15 and palladium rose by 0.3% to $945.50.
Reporting by Ashitha Shivaprasad in Bengaluru, additional reporting by Ishaan Arora; Editing by Elaine Hardcastle and Shailesh Kuber
