Gold prices fell more than 1% on Monday as investors waited for news from the White House on potential tariffs on bullion and U.S. inflation data that will provide a steer on the Federal Reserve's interest rate path.
Spot gold was down 1.4% at $3,350.94 an ounce by 1135 GMT after touching $3,408.06 on Friday, its highest since July 23.
U.S. gold futures for December delivery fell 2.5% to $3,404.90, having hit a record high of $3,534.10 on Friday after reports that Washington had imposed tariffs on imports of 1 kg (2.2 lb) bullion bars.
The White House said on Friday that it would issue an executive order clarifying its stance on the tariffs.
"Spot gold is tumbling, along with futures, as markets unwind the initial shock from U.S. tariffs potentially plunging bullion flows into chaos," said Han Tan, chief market analyst at investment trading platform Nemo.Money.
Market attention is also focused on Tuesday's U.S. consumer price data, with tariffs expected to push core inflation up 0.3%, lifting the annual rate to 3%, well above the Fed's 2% target.
"Lower than expected CPI prints that bolster bets for Fed rate cuts by year-end may restore spot gold above the psychological $3,400 level," Tan said.
A recent softer than expected U.S. jobs report has prompted markets to price in a near 90% chance of a September cut to interest rates and at least one more reduction by the end of the year. Lower rates typically benefit non-yielding gold.
On the trade front, a deadline for China to agree a tariff deal with Washington, due to expire on Tuesday, is expected to be extended again, while U.S. President Donald Trump and Russian leader Vladimir Putin are due to meet in Alaska on Friday to discuss ending the Ukraine war.
"Rising expectations of a peace deal between Ukraine and Russia, negotiated by Trump, have reduced some safe haven demand (for gold)," SP Angel analyst John Meyer said in a note.
In other precious metals, spot silver fell 1.5% to $37.74 an ounce, platinum was down 2% at $1,307.70 and palladium lost 0.2% to $1,123.43.
Source: Reuters
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