Gold starting the day in the mid-$1,330 range – rebounding from Tuesday’s intraday losses – as the appetite for riskier assets waned on persistent fears of an ongoing U.S.-China trade war. Also boosting gold is the strong belief that the Fed will ease interest rates in the near future.

This morning, gold held tight to its overnight gains as the U.S. Consumer Price Index showed a 0.1% rise in May, after a 0.3% rise in April. It’s the smallest rise in inflation for 2019. This low inflation is expected to be positive for gold since it should bolster Federal Reserve rate cuts.

The CME FedWatch Tool shows a 65.8% chance of a rate cut for the Fed’s July 31st meeting, while the June 19th meeting has over an 80% chance of not changing the rate.

Globally, stocks are feeling weak with European and Asian stock indexes drifting down overnight. Meanwhile, U.S. stocks ended their longest winning streak in two months yesterday with both the S&P and Dow Jones closing slightly lower. The U.S. stock indexes are continuing this weaker trend so far this morning.

Gold futures are edging up, with the August Comex contract currently sitting at $1,334/ounce, up $3.70.

U.S. President Donald Trump said Tuesday that he’s personally holding up a trade deal with China and won’t agree to complete it unless Beijing returns to terms negotiated earlier in the year. On Monday, he threatened to raise tariffs on China if President Xi Jinping doesn’t meet with him at the upcoming Group of 20 summit later this month in Japan.

Meanwhile, in the U.K., the Labour Party plans to force a vote Wednesday that would prevent a future prime minister from pushing through a no-Brexit deal against the wishes of MPs.

The trade war and expectation of a Federal Reserve rate cut have boosted gold so far this month, and the yellow metal could be poised for a “breakout” year, Carter Worth of Cornerstone Macro told CNBC on Monday.

Silver futures are on the rise, with the Comex August contract currently at $14.820, up .046. Spot palladium made solid gains yesterday, staying most of the day above $1,400 and ounce and it is opening with the same strength this morning. Spot platinum, which is sensitive to the growth of the Chinese automotive industry, rose 1.1%.