Gold prices dropped to their lowest level in over a week on Tuesday, as investors took profits following a record high in the previous session, amid ongoing concerns about U.S. President Donald Trump’s tariff policies.
As of 01:46 a.m. (1846 GMT), spot gold fell 1.4% to $2,909.59 per ounce, marking its lowest level since February 17. Gold had reached a record high of $2,956.15 on Monday. U.S. gold futures also settled 1.5% lower, at $2,918.80.
Bob Haberkorn, senior market strategist at RJO Futures, noted, “You are seeing profit-taking as well as people looking to get to the sidelines and re-establish positions at a lower price.”
Gold, traditionally a safe-haven asset, has seen a record-setting year, hitting 11 new highs so far, including surpassing the $2,950/oz milestone. Despite this, investor sentiment remains cautious amid the looming uncertainty over trade issues.
President Trump stated on Monday that tariffs on imports from Canada and Mexico are “on time and on schedule,” despite the countries’ efforts to strengthen border security and curb fentanyl trafficking ahead of a March 4 deadline. Peter Grant, vice president and senior metals strategist at Zaner Metals, remarked, “I still think there’s enough uncertainty out there associated with tariffs and trade more generally… dips are going to continue to be viewed as buying opportunities.”
In the week to February 18, gold speculators reduced their net long positions by 13,605 contracts, bringing the total to 201,962.
Meanwhile, economists and investors anticipate a “strong and systematic” response from the U.S. Federal Reserve to inflationary pressures and shifts in the labor market, as outlined in research published on Monday by the San Francisco Fed. If inflation rises, the Fed may keep interest rates high, potentially diminishing the appeal of non-yielding gold.
Market participants are also awaiting the release of the U.S. Personal Consumption Expenditures (PCE) report on Friday, which is the Fed’s preferred measure of inflation, for further insight into the central bank’s approach to monetary policy.
In other precious metals, spot silver fell 2.3% to $31.61 an ounce, platinum dropped 0.5% to $962.15, and palladium declined by 1.9% to $922.39. Platinum and palladium prices hit their lowest levels since January 30 and January 9, respectively, earlier in the session.
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