Gold prices fell on Wednesday (26/2) after a recent record rally, as investors awaited inflation data due later in the week and the latest developments on US President Donald Trump's tariff plans.

Spot gold fell 0.1% to $2,912.51 an ounce by 1:49 p.m. ET (1849 GMT). Bullion, a preferred hedge against uncertainty and inflation, hit a record high of $2,956.15 on Monday amid trade war concerns stemming from the threat of tariffs.

US gold futures settled 0.4% higher at $2,930.60.

On Tuesday, Trump ordered an investigation into potential new tariffs, opening a new tab on copper imports to rebuild US production of the metal that is essential for electric vehicles, military hardware, the power grid and many consumer goods. "The bulls are still in play... We wouldn't be surprised to see a period of consolidation ahead of some key data," said David Meger, director of metals trading at High Ridge Futures.

Investors' focus is also on the U.S. Personal Consumption Expenditures (PCE) report, the Federal Reserve's preferred inflation gauge, due out on Friday.

Higher-than-expected inflation pressures could delay further rate cuts, which are already priced in; gold is a key hedge against such inflationary pressures, so it should rally higher, Meger added.

The U.S. central bank cut rates three times last year, for a total of 75 basis points.

Money markets are currently pricing in a 54 basis point Fed rate cut by year-end, which implies two more easing steps of 25 basis points and about a 20% chance of an additional cut.

"Central bank behavior will be key to gold's fate, as it has been a key demand driver in recent years," Frank Watson, market analyst at Kinesis Money, said in a note. Spot silver rose 0.3% to $31.81, platinum fell 0.1% to $965.55, and palladium fell 0.9% to $919.50. (Newsmaker23)

Source: Reuters