Gold prices declined on Tuesday as investors locked in profits following a strong rally in the previous session. Additional pressure came from a firmer U.S. dollar, which reduced the appeal of the precious metal.
Spot gold dropped 1% to $5,179.77 per ounce by 07:35 GMT, ending a four-session winning streak. Earlier in the day, bullion had touched its highest level in more than three weeks before reversing lower. U.S. gold futures for April delivery slipped 0.5% to $5,199.40.
Profit-Taking and Stronger Dollar Weigh on Gold
Analysts noted that Monday’s more than 2% surge in gold prices prompted short-term profit-taking. Ilya Spivak, head of global macro at Tastylive, said the market is currently digesting those gains. He also pointed out that recent volatility on Wall Street has not fully spilled over into Asian markets.
Asian equities steadied after a volatile start, as a fresh artificial intelligence-driven selloff in U.S. stocks unsettled investors. Sentiment was further affected by ongoing concerns over U.S. President Donald Trump’s tariff policy and broader geopolitical tensions.
The U.S. dollar edged higher, making dollar-denominated gold more expensive for investors holding other currencies. A stronger greenback typically limits gains in gold, as it reduces demand from overseas buyers.
Trade Policy and Federal Reserve Outlook
On Monday, President Donald Trump warned countries against withdrawing from recently negotiated trade agreements after the Supreme Court invalidated his emergency tariffs. He said nations attempting to reverse course could face significantly higher duties under alternative trade laws.
Meanwhile, Federal Reserve Governor Christopher Waller signalled he would consider keeping interest rates unchanged at the March meeting if upcoming February employment data suggests the U.S. labour market has stabilised after weakness earlier in 2025.
According to CME’s FedWatch Tool, markets are currently pricing in three 25-basis-point rate cuts this year.
Other Precious Metals
In the broader precious metals market, spot silver was steady at $88.19 per ounce after reaching a more than two-week high on Monday. Spot platinum rose 0.1% to $2,154.97, while palladium gained 0.4% to $1,750.14.
