Gold prices fell after hitting a record high of $3,500, but traders booking profits and improving risk appetite sent Bullion lower, despite falling US Treasury yields. At the time of writing, XAU/USD was hovering near $3,400, down more than 0.63%.

The latest news from US Treasury Secretary Scott Bessent, who said he sees a de-escalation with China, boosted market sentiment, which has been a drag on Bullion prices. Since the headline, the yellow metal has fallen $50 from around $3,420 to $3,370.

However, uncertainty about US trade policy and President Donald Trump's attacks on the Federal Reserve (Fed) could boost demand for Gold and push prices higher. So far this year, Gold prices remain up almost 29% on geopolitics and Trump's volatile sentiment.

Last week, Chairman Jerome Powell said the Fed would remain data-driven and even flagged the possibility of a stagflation scenario, admitting, "We may find ourselves in a challenging scenario where the objectives of our dual mandate are at odds."

Amid this backdrop and an uncertain economic outlook, investors are flocking to safe havens, as Gold ETF flows surged, according to the World Gold Council (WGC).

"Physically backed gold ETFs globally1 reported strong inflows in March totaling US$8.6 billion. This helped push total Q1 flows of US$21 billion (226t) to the second highest quarterly level in dollar terms, behind only Q2 2020's US$24 billion (433t)," the WGC said. (Newsmaker23)

Source: FXstreet