2025.04.2909:48:00UTC+00Gold Drifts Lower As Dollar Rises On Tariff Relief Hopes

Gold resumed its downtrend on Tuesday after showing a significant move back to the upside in the previous session.

Spot gold fell 0.9 percent to $3,314.68 per ounce in early European trade, while U.S. gold futures were down 0.7 percent at $3,323.26.

The dollar was resilient against its rivals but still remained on course for a hefty monthly fall due to tariff-related worries and fears of an U.S. economic slowdown.

Investor sentiment improved in financial markets after reports suggested that the Trump administration will reduce auto tariffs on foreign parts to support domestic manufacturers.

"President Trump is building an important partnership with both the domestic automakers and our great American workers," Commerce Secretary Howard Lutnick said in a statement. An announcement in this regard is expected later in the day.

The revised approach may lower duties on foreign parts used in domestically produced cars while keeping tariffs on fully imported vehicles.

Traders also await key U.S. economic data this week that could offer some insights into the impact of President Trump's trade policies.

The week ahead will see reports on first quarter GDP, non-farm payroll numbers, and Federal Reserve's preferred inflation gauge - Personal Consumption Expenditures (PCE) Price Index.

Meanwhile, trading later in the day may be impacted by reaction to reports on U.S. consumer confidence and job openings.