The price of the yellow metal asset fell significantly as the market now sees the impact of the new tariff on physical gold, which was the cause of its moderate fall at the end of last week.
In addition, investors are also currently awaiting the release of US inflation data (CPI) which is a gauge for the Fed in setting its next economic policy.
At 9.20 am, the price of gold was at $3,352.21, up 0.29% since it opened in early trading on Tuesday in the Asian session.
Demand for bullion was affected by speculation that a meeting between US President Donald Trump and his Russian counterpart, Vladimir Putin on Friday to reveal a ceasefire plan in Ukraine.
The recovery of the US dollar currency also took place amid a fall in US Treasury yields which would support gold prices towards the $3,400 level again.
On Tuesday, the US Bureau of Labor Statistics (BLS) is expected to release its Consumer Price Index (CPI) for July, with headline inflation estimated to be around 2.8%, up from 2.7% in June.
Core CPI is expected to rise above the 3% mark for the first time since February 2025.
Meanwhile, Donald Trump announced that he would withdraw proposed tariffs on physical gold products.
Ahead of the week, US economic data will feature inflation reports, jobless claims, industrial production data, retail sales and the University of Michigan Consumer Sentiment for August.
