Gold settles lower despite US policy easing expectations

Gold bars

Gold prices fell on Tuesday despite inflation data boosting expectations for US interest rate cuts this year and easing concerns over potential US tariffs on bullion.

December gold futures closed down 0.2%, or $5.70, at $3,399 an ounce.

The decline came even as the US dollar index, which measures the greenback against a basket of major currencies, slipped 0.45% to 98.1 at 10:23 p.m. Mecca time.

Gold had dropped 2.5% in the previous session after the White House denied reports that the US would impose tariffs on bullion, news that had pushed prices to a record high on Friday.

Data released Tuesday showed the US core consumer price index rose to 3.1% in July from 2.9% in June, above expectations of 3%. Headline inflation held steady at 2.7%, slightly below forecasts of 2.8%, while both monthly readings matched estimates.

According to the FedWatch tool, markets are now pricing in a 94% chance of a 25-basis-point rate cut in September, up from 86% a day earlier and 57% a month ago.