Gold fell slightly on Tuesday as a Federal Reserve member indicated a cautious approach to interest rate reduction this year and U.S. President Donald Trump allayed fears by saying that not all of his proposed tariffs will go into effect on April 2.
At $3,010.72 an ounce, spot gold was down 0.1% as of 0019 GMT. The price of US gold futures, GOLD, remained stable at $3,015.10.
While he warned that not all of his threatening duties will be implemented on April 2 and that certain nations would receive reprieve, Trump announced on Monday that car tariffs are coming shortly. Wall Street saw this as a show of flexibility on a topic that has been causing market turbulence for weeks.
Bullion, which is viewed as a hedge against economic and geopolitical risks, frequently prospers in an environment with low interest rates.
According to Raphael Bostic, president of the Atlanta Federal Reserve, the Fed will only drop its benchmark rate by a quarter of a percentage point by the end of this year because he expects slower inflation development in the months ahead.
At his colleagues’ conference last week, Bostic projected two rate cuts this year, which was in line with the consensus estimate of two quarter-point rate cuts in 2025.
Next, the Fed’s favourite inflation indicator, the Personal Consumption Expenditures (PCE) index, which is expected on Friday, will be the focus of market attention.
Funds that invest in gold miners, however, are expected to have their biggest net monthly inflows in almost a year in March as record-high gold prices enhance cash flow and strengthen company profit outlooks.
Platinum (PL1) dipped 0.2% to $971.15, palladium (XPDUSD1) dropped 0.1% to $950.29, while spot silver (XAGUSD1) dropped 0.2% to $32.94 an ounce.
