Gold prices retreated during Monday's Asian trade as improving risk appetite weighed on the precious metal ahead of closely watched U.S. inflation figures.
By 4:15 pm AEST (6:15 am GMT), spot gold was down $23.96, or 0.7%, at $3,373.14 per ounce.
The decline followed last week’s surge in gold futures to a record above $3,530 per ounce after the U.S. Customs and Border Protection ruled that standard 1-kilogram and 100-ounce bullion bars would be subject to import tariffs.
The decision disrupted global bullion flows, with some Swiss refiners halting shipments to the United States, Reuters reported. Industry bodies warned that the move could harm the international gold trade, particularly from Switzerland, a major refining hub.
The White House has since said it will issue an executive order clarifying the tariff policy, easing tensions in the futures market.
Gold’s latest pullback came as the dollar extended modest gains, pressuring the USD-denominated metal and holding prices below the key $3,400 psychological barrier.
However, expectations for an imminent easing in U.S. monetary policy limited the downside. According to the CME Group FedWatch Tool, markets are now pricing in an 88.5% probability of a Federal Reserve rate cut in September, with at least two cuts anticipated before year-end.
Support for the non-yielding asset has been buoyed by dovish commentary from policymakers. Fed Governor Michelle Bowman said on Saturday that recent soft labour market data reinforced her concerns about underlying economic fragility and strengthened her confidence that three rate cuts in 2025 would be appropriate.
In addition, the People’s Bank of China (PBOC) extended its gold-buying streak to a ninth straight month in July, official data showed on Thursday, underscoring sustained demand from one of the world’s largest consumers.
Traders now turn their focus to Tuesday’s U.S. consumer price index report, which could shape the Fed’s next policy move and provide a fresh catalyst for bullion prices.
