St Louis Fed president James Bullard weighed in, saying a cut may be warranted soon. Markets are now discounting at least two quarter-point reductions by year-end -- one more than just days ago. Billionaire Stan Druckenmiller said rates could go to zero in 18 months if the economy softens.
On Tuesday, there were more signs of weakness from across Asia as revised data showed South Korea's economy shrank 0.4 per cent in the first quarter, the worst performance since the financial crisis, while the purchasing managers index in trade-dependent Singapore dropped below 50.
"Gold is once again trying to reclaim its role as a safe haven amid growing trade tensions and consequent risks to growth," Joni Teves, a strategist at UBS Group AG, said in a note. The price "looks like it is getting comfortable above US$1,300, with aspirations of testing this year's highs," she said.
