PRECIOUS-Gold slips as Trump eases tariff threats, Fed shows caution over rate cut

Reuters
03-25
PRECIOUS-Gold slips as Trump eases tariff threats, Fed shows caution over rate cut

March 25 (Reuters) - Gold inched lower on Tuesday after U.S. President Donald Trump eased concerns by stating that not all of his proposed tariffs would take effect on April 2, while a Federal Reserve official signalled a cautious stance on interest rate cuts this year.

FUNDAMENTALS

* Spot gold XAU= was down 0.1% at $3,010.72 an ounce, as of 0019 GMT. U.S. gold futures GCcv1 was steady at $3,015.10.

* Trump said on Monday automobile tariffs are coming soon even as he indicated that not all of his threatened levies would be imposed on April 2 and some countries may get breaks, a move Wall Street took as a sign of flexibility on a matter that has roiled markets for weeks.

* Bullion, seen as a hedge against geopolitical and economic uncertainties, often thrives in a low-interest-rate environment.

* Atlanta Federal Reserve President Raphael Bostic said he anticipates slower progress on inflation in coming months and as a result now sees the Fed cutting its benchmark rate only a quarter of a percentage point by this year-end.

* Bostic anticipated two Fed rate cuts this year, aligning with his colleagues' meeting last week, where the median projection foresaw two quarter-point rate cuts in 2025.

* Markets will next look to the Personal Consumption Expenditures (PCE) index, the Fed's preferred inflation measure, due on Friday.

* Meanwhile, funds that invest in gold miners are set to attract their largest net monthly inflows in more than a year in March, as record-high gold prices improve firms' profit outlooks and boost cash flow.

* Spot silver XAG= fell 0.2% to $32.94 an ounce, platinum XPT= eased 0.2% to $971.15 and palladium XPD= lost 0.1% to $950.29.

DATA/EVENTS $(GMT.NZ)$

0900 Germany Ifo Business Climate New, Ifo Curr Conditions New, Ifo Expectations New Mar

1400 US Consumer Confidence Mar

1400 US New Home Sales-Units Feb

(Reporting by Anushree Mukherjee in Bengaluru; Editing by Rashmi Aich)

((anushree.ashishMukherjee@thomsonreuters.com;))

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