Gold price (XAU/USD) maintains its offered tone through the first half of the European session on Wednesday, though it lacks follow-through selling as traders opt to wait for the release of the US consumer inflation figures. In the meantime, the US Dollar (USD) attracts some buyers in the wake of Federal Reserve (Fed) Chair Jerome Powell's hawkish remarks on Tuesday. This, along with a generally positive risk tone, undermines the commodity for the second straight day.

However, concerns that US President Donald Trump's new levies on commodity imports and promised reciprocal tariffs, along with geopolitical risks, should continue to act as a tailwind for the safe-haven Gold price. This, in turn, warrants some caution before confirming that the XAU/USD has topped out in the near term and positioning for any meaningful corrective decline from the all-time peak, around the $2,942-2,943 area touched on Tuesday amid trade war fears.
Gold price attracts some sellers for the second straight day amid a modest USD uptick.
The overnight hawkish remarks from Fed Chair Powell revived demand for the buck.
Trade war fears should help limit any corrective slide for the safe-haven XAU/USD pair.
Gold price bears seem non committed amid worries about Trump's tariffs
Federal Reserve Chair Jerome Powell, in remarks before the Senate Banking Committee on Tuesday, called the economy strong overall with a solid labor market and said that inflation is easing but still above the 2% goal.
This comes on top of Friday's mostly upbeat US employment details and expectations that US President Donald Trump's policies would reignite inflationary pressure, which could allow the Fed to stick to its hawkish stance.
The US Dollar gains some positive traction in the wake of rising bets that the Fed would hold interest rates steady in the foreseeable future and exert pressure on the Gold price for the second consecutive day on Wednesday.
US President Donald Trump signed executive orders to impose 25% tariffs on steel and aluminum imports into the US and promised broader reciprocal tariffs to match the levies other governments charge on US products.
Trump also signaled he would look at imposing additional tariffs on automobiles, pharmaceuticals, and computer chips, which fueled worries about a global trade war and acts as a tailwind for the safe-
haven precious metal.
Investors now look forward to the release of the latest US consumer inflation figures for fresh cues about the Fed's rate-cut path and determining the near-term trajectory for the USD and the non-yielding yellow metal.
The headline US Consumer Price Index is seen rising 2.9% YoY in January and the core CPI (excluding food and energy prices) coming in at a 3.1% YoY rate, slightly lower than the 3.2% recorded in the previous month.

Source: Fxstreet