WASHINGTON (dpa-AFX) - Gold prices were slightly lower on Tuesday as the dollar index inched up on hawkish remarks from a Federal Reserve official.
The greenback also drew support from a weaker yen, which hit a two-month low against the dollar amid expectations that Liberal Democratic Party candidate Sanae Takaichi will pursue a more expansionist administration.
Spot gold slid 0.2 percent to $3,953.07 per ounce in European trade, after having hit a new record high at $3,977.45 per ounce earlier on the back of geopolitical tensions, U.S. government shutdown worries and rate-cut expectations. U.S. gold futures were little changed at $3,977.60.
Kansas City Fed President Jeffrey Schmid has urged caution on more rate cuts, saying inflation is too high for aggressive easing.
As the Fed navigates between the twin risks of overly tight and overly easy policy, it should stay focused on the danger of too-high inflation, he argued.
That said, markets still price in a 94 percent chance of an October rate cut and an 84 percent chance in December, as per CME data.
Meanwhile, as the U.S. government shutdown enters its seventh day, President Donald Trump said Democrats must end the shutdown before talks can start.
The Senate on Monday evening failed to pass a short-term budget to keep federal agencies open. Such a short-term measure, also called 'continuing resolution', would keep federal agencies open through 21 November.
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