Gold slips as Treasury yields climb; Trump tariff moves on radar

Gold prices inched lower on Wednesday, pressured by rising U.S. Treasury yields, while investors tracked developments surrounding the possible impact of U.S. President Donald Trump's tariffs on inflation and global trade.

FUNDAMENTALS

* Spot gold GOLD slipped 0.1% to $2,916.09 an ounce as of 0028 GMT, while U.S. gold futures GOLD edged up 0.2% to $2,926.10.

* The benchmark 10-year U.S. Treasury yield US10Y rebounded from an over four-month low hit in the previous session, reducing the appeal of non-yielding gold.

* Trump's new 25% tariffs on imports from Mexico and Canada took effect on Tuesday, along with a doubling of duties on Chinese goods to 20%, sparking trade wars that could slam economic growth and lift prices for Americans still smarting from years of high inflation.

* In response to Trump's newly imposed tariffs, China and Canada retaliated with their own set of tariffs on a range of U.S. goods.

* Federal Reserve Bank of New York President John Williams said on Tuesday that the U.S. tariffs will likely drive inflation higher, but believes the current interest rate policy is appropriate and does not need changes.

* The Fed has kept rates steady, after three cuts last year. However, market expectation hint at more cuts in June, with a potential further reduction in September. (FEDWATCH)

* Markets now await the ADP employment report due later in the day and the U.S. nonfarm payrolls report on Friday for more insights on Fed's monetary policy plans.

* Spot silver XAGUSD1! eased 0.2% to $31.90 an ounce, platinum PL1! lost 0.2% to $958.75 and palladium XPDUSD1! slipped 0.3% to $939.00.

DATA/EVENTS (GMT)

0030 Japan JibunBK Comp Op Final SA, JibunBK SVC PMI Final SA Feb

0145 China Caixin Services PMI Feb

0850 France HCOB - Services PMI, HCOB Composite PMI Feb

0855 Germany HCOB Services PMI, HCOB Composite Final PMI Feb

0900 EU HCOB Services Final PMI, HCOB - Composite Final PMI Feb

0930 UK S&P GLOBAL PMI: COMPOSITE - OUTPUT Feb

0930 UK Reserve Assets Total

1445 US S&P Global Comp PMI Final, S&P Global Svcs PMI Final Feb

1500 US Factory Orders MM, ISM N-Mfg PMI Feb