(Jan 8): Gold prices edged higher on Wednesday due to the risks stemming from the tariff plans proposed by President-elect Donald Trump, with investors waiting for US economic data for guidance on the US Federal Reserve's interest rate stance in 2025.

Spot gold gained 0.2% to US$2,653.35 per ounce, as of 0928 GMT. US gold futures GCcv1 rose 0.1% to US$2,667.20.

The risk of a Trump trade war, sticky inflation and worries about fiscal stability as US Treasury yields rise will be current and future themes that are potentially risk strengthening, which will be gold supportive, said Ole Hansen, head of commodity strategy at Saxo Bank.

Trump will be sworn in as president of the United States on Jan 20. His proposed tariffs and protectionist trade policies are expected to be inflationary and could spark trade wars, adding to gold's allure as a safe-haven asset.

Gold is also used as a hedge against inflation, although higher interest rates reduce the appeal of holding non-yielding bullion.

The market awaits ADP employment numbers and the minutes from the Fed's December meeting, both due later in the day, along with US nonfarm payrolls report due on Friday, which could provide more insight into the Fed's policy direction.

Data on Tuesday showed US job openings increased in November, while hiring softened, implying a slower labor market that might not need Fed to be in a rush to cut rates.

"Any softness in the US macro data this week could open the door for gains if investors become more optimistic about the deliverance of interest rate cuts from the Fed in 2025," analysts at KCM Trade said in a note.

Following three rate cuts in 2024, the Fed in December forecasted only two rate cuts for 2025. Currently, markets anticipate 38 basis points of easing this year.

Uploaded by Lam Seng Fatt