Gold prices dipped slightly on Tuesday, March 25, following comments from US President Donald Trump that alleviated some market concerns. Trump announced that not all of his proposed tariffs would take effect on April 2, and that certain countries may receive exemptions. Additionally, a Federal Reserve official’s cautious stance on interest rate cuts this year added pressure on the precious metal.
As of 0019 GMT, spot gold was down 0.1% at $3,010.72 per ounce, while US gold futures held steady at $3,015.10.
Trump’s statement on Monday that automobile tariffs are imminent, yet some of his threatened levies could be delayed or reduced, was seen by Wall Street as a sign of flexibility. This move helped to ease market fears surrounding the potential impact of trade tariffs, which had been a source of uncertainty for weeks.
Gold, traditionally viewed as a safe-haven asset in times of geopolitical and economic uncertainty, typically benefits in a low-interest-rate environment.
Fed Signals Slow Rate Cuts
Meanwhile, Atlanta Federal Reserve President Raphael Bostic remarked that he expects inflation to progress more slowly in the coming months. As a result, he now anticipates the Fed will cut its benchmark interest rate by only 25 basis points by the end of this year. This follows the Fed’s recent meeting, where the median projection indicated two quarter-point rate cuts in 2025.
Markets are now awaiting the release of the Personal Consumption Expenditures (PCE) index on Friday, the Fed’s preferred inflation gauge, which could offer further insight into the central bank’s future monetary policy decisions.
Gold Miners See Strong Inflows
Despite the dip in gold prices, funds invested in gold miners are experiencing their largest net monthly inflows in over a year. This surge is driven by record-high gold prices, which have boosted the profit outlooks and cash flow for gold mining companies.
In summary, gold prices experienced modest declines on Tuesday amid easing tariff concerns and a more cautious outlook on interest rate cuts from the Fed. Market participants are now turning their attention to upcoming economic data, including the PCE index, to gauge the Fed’s next steps.