The decline followed a volatile week for bullion, which had initially gained ground after a U.S. appeals court reinstated tariffs introduced under former President Donald Trump. The decision temporarily reversed a trade court ruling that had blocked the tariffs, fueling safe-haven demand on Thursday and lifting gold by nearly 1%.
However, that momentum faded as investors adopted a wait-and-see approach ahead of Friday’s release of the Personal Consumption Expenditures (PCE) Price Index—considered the Federal Reserve’s preferred gauge of inflation. The data could influence expectations for interest rate cuts later this year.
Fed Officials Signal Caution Despite Rate Cut Hopes
San Francisco Federal Reserve President Mary Daly reiterated the possibility of two interest rate cuts by year-end, in line with the Fed’s March projections. Still, she stressed that rates must remain steady in the short term to help bring inflation back to the 2% target.
Improved sentiment in global equity markets also diverted attention away from gold, as easing trade tensions between the U.S. and key partners renewed appetite for risk assets.
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