09:22 AM EDT, 04/10/2025 (MT Newswires) -- Gold traded higher early on Thursday as U.S. stock markets look set to weaken following a day-prior surge after U.S. President Trump partially walked back tariff threats on most of the country's trading partners but heightened his trade war with China, while U.S. inflation fell last month.

Gold for June delivery was last seen up US$68.00 to US$3,147.40 per ounce, nearing the April 2 record high of US$3,166.20.

The metal's rise comes as markets continue to process Trump's partial walk back on blanket tariffs for most of the country's trading partners, suspending them for 90 days, while hiking tariffs on Chinese goods to 125%. China on Thursday retaliated by imposing 84% levies on U.S. products, as the world's two largest economies square off in a trade war.

Overseas markets were sharply higher overnight, catching up to Wednesday's surge in North American markets following the tariff pause. However futures to a much lower open for U.S. exchanges as investors assess the prospects for global growth amid the chaos of Trump's trade wars.

"Gold's rally ... sends a signal that all is not well, and its continued strength suggests that despite the tariff pause, underlying concerns remain - geopolitical and economic tensions, mounting fiscal debt, and ongoing central bank demand continue to support precious metals," Saxo Bank noted.

The dollar was sharply lower after the U.S. Bureau of Labor Statistics reported the March Consumer Price Index fell by 0.1%, down from a rise of 0.2% a month earlier and under the FactSet consensus estimate for a 0.1% rise. Excluding volatile food and energy, core CPI was up 0.1% from the prior month, down from 0.2% in February and under the consensus estimate for a 0.3% rise.

The ICE dollar index was last seen down 1.21 points to 101.69 following the inflation data. Treasury yields, which had been climbing as buyers fled the market due to Trump's tariff threats, also fell. The U.S. two-year note was last seen paying 3.858%, down 7.3 basis points, while the 10-year note was paying 4.349%, down 0.5 points.