Gold retreated more than 2% on Tuesday, slipping from a three week high as profit taking and a firmer dollar weighed on the market, while traders awaited clarity on US tariff plans and rising tensions between Washington and Tehran.
Spot gold dropped 2.1% to $5,119.67 per ounce by 9:33 a.m. ET (1433 GMT). US gold futures for April delivery were down 1.7% at $5,138.30.
The US dollar rose 0.3%, making greenback-priced bullion more expensive for holders of other currencies,Reuters reports.
"Gold prices (had been) trending higher again so I suspect this is just a corrective pullback," said Jim Wyckoff, senior analyst at Kitco Metals, adding that a higher dollar is also having a negative influence on the prices.
Prices hit a three-week high earlier in the session, boosted after US President Donald Trump vowed to raise duties to 15% following the Supreme Court ruling that his use of an emergency law to impose tariffs exceeded his authority.
However, the United States on Tuesday imposed a 10% tariff on all non exempt goods, as first announced by Trump on Friday.
Iran and the US will hold a third round of nuclear talks on Thursday in Geneva, amid growing concerns about the risk of military conflict between the longtime adversaries
"You've still got solid safe haven demand, with Iran–US tensions and tariff uncertainty limiting selling in gold, keeping fundamentals supportive. But as prices near record highs, they'll face stiff resistance, and pushing to new highs would likely require a fresh geopolitical catalyst," Wyckoff said.
Gold, a traditional safe-haven asset, tends to benefit in times of geopolitical and economic uncertainty.
Outgoing Atlanta Federal Reserve President Raphael Bostic told Reuters the US may be entering a phase of structurally higher unemployment as firms adopt AI to cut labor, a shift that the Fed may not be able to counter with lower rates.
Spot silver fell 2% to $86.45 per ounce, after hitting a more than two-week high on Monday.
Spot platinum was down 1.6% to $2,119.29 per ounce, and palladium lost 1.4%, to $1,719.29.