By Rahul Paswan
(Reuters) – Gold prices declined on Tuesday, as investors booked profits after bullion hit a record high on safe-haven demand amid concerns that U.S. President Donald Trump’s tariff plans could fuel inflation and trigger a major global trade war.
Spot gold fell 0.5% to $2,937.03 an ounce as of 0739 GMT, after scaling its all-time high of $2,956.15 on Monday. U.S. gold futures declined 0.4% to $2,952.
“It’s just a marginal decline in prices but safe-haven demand remains strong due to tariff uncertainties,” said Soni Kumari, a commodity strategist at ANZ.
Trump said on Monday tariffs on Canadian and Mexican imports were “on time and on schedule” despite efforts by the countries to beef up border security and halt the flow of fentanyl into the U.S. ahead of a March 4 deadline.
Market participants may be back to factor for tariff risks, as the extended deadline for Mexico and Canada tariffs approaches next week, said IG market strategist Yeap Jun Rong.
Meanwhile, research published by the San Francisco Fed showed that investors and economists expect the U.S. Federal Reserve to respond “strongly and systematically” to changes in inflation and the labour market.
“This week’s lineup of Fed policymakers may deliver some hawkish rhetoric, but with market expectations already pricing in a prolonged rate hold over the next two meetings, impact on gold prices may be more contained,” Yeap said.
Gold is considered a safe investment during economic and political uncertainties, and thrives in a low interest rate environment.
Investors await Friday’s release of the U.S. Personal Consumption Expenditures report, the Fed’s preferred inflation gauge, for insights into the rate cut path.
Elsewhere, India’s gold imports are set to fall 85% in February from a year earlier to their lowest in two decades, with demand sapped by record bullion prices.
Spot silver shed 0.1% to $32.30 an ounce, platinum dropped 0.5% to $961.75, and palladium was flat at $939.97.
(Reporting by Rahul Paswan in Bengaluru; Editing by Subhranshu Sahu and Varun H K)
