WASHINGTON (dpa-AFX) - Gold prices fell on Tuesday as investors are awaiting updates on tariffs amid increasing inflation in the U.S.
Front Month Comex Gold for July delivery fell $21.70 or (0.65%) to $3,329.80 per troy ounce today.
Front Month Comex Silver for July delivery slumped 62.80 cents (or 1.63%) to $37.834 per troy ounce today.
On the economic front, data released by the Labor Department revealed that the core consumer prices, which exclude food and energy, rose by 0.2% in June. Annual core inflation ticked up to 2.9%.
The Labor Department said its consumer price index rose by 0.3% in June after inching up by 0.1% in May. The annual rate of consumer price growth accelerated to 2.7%.
On the tariff front, on his social media platform 'Truth Social', President Donald Trump hinted at a trade agreement with Indonesia.
Over the past 10-12 days, Trump has threatened major trading partners with heavy tariffs, citing various reasons.
After pushing the 'reciprocal tariff' suspension period up to August 1 from July 9, Trump started a spate of tariff imposition aggressively.
First, he sent letters to 20-plus countries indicating the new tariffs. Then, he targeted BRICS alliance nations followed by Brazil, Canada, Mexico, and the EU. He also announced plans to tax copper and pharmaceutical imports to the US heavily.
Notably, the UK, China, and Vietnam have reached trade agreements with the US so far.
Over the past two days, expressing displeasure with Russian President Vladimir Putin on prolonging the war (that started in February 2022) with Ukraine, Trump threatened Russia with 100% secondary tariffs to end the war soon. Potential oil buyers from Russia may have to suffer additional tariffs.
However, responding to this, the Russian Foreign Minister stated that the country was ready to cope with the new sanctions.
With around a fortnight's time for reaching a trade deal with the US, countries are frantically negotiating with their US counterparts to find a balanced agreement.
The US Producer Price Index is to be released tomorrow.
The US Federal Reserve had indicated in the past several days to 'wait-and-watch' for inflation and jobs data as well as the impact of tariffs on the US economy before making a call on interest rate cuts.
Today's data has led to a tinge of optimism among investors to presume that the Fed may cut rates sooner.
In the Middle East last week, Houthi rebels attacked and sank two bulk carriers, Magic Seas, and Eternity C, on successive days. Tensions in the region have now soared with Houthis firing Unmanned Aerial Vehicles at Israel's southern port city of Eilat.
With the US and the West remaining quiet as of now, any direct intervention from them could escalate the crisis for a prolonged period and drive gold prices upwards.
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