BENGALURU (Feb 27): Gold prices fell over 1% to their lowest level in more than a week on Thursday, as the US dollar firmed, while investors awaited a key inflation print that could offer clues on the Federal Reserve's monetary policy.

Spot gold fell 1.2% to US$2,880.79 an ounce by 0910 GMT, its lowest since Feb 17. Prices hit a record peak of US$2,956.15 on Monday, driven by safe-haven flows.

US gold futures lost 0.7% to US$2,909.30.

The dollar index rose 0.2% to move further from the recent 11-week lows, making greenback-priced bullion more expensive for other currency holders.

US President Donald Trump raised hopes for another month-long pause on steep new tariffs on imports from Mexico and Canada, saying they could take effect on April 2, and floated a 25% "reciprocal" tariff on European cars and other goods.

This uncertainty "sent investors rushing towards the dollar's embrace, enforcing fresh pressure on gold, which was already experiencing profit-taking from record highs", said Lukman Otunuga, senior research analyst at FXTM.

Investors are also looking for cues on US monetary policy, with several officials due to speak later in the day and the Personal Consumption Expenditures (PCE) index due on Friday. The consensus forecast was for a PCE monthly index of 0.3%, unchanged from December 2024, according to a Reuters poll.

Markets expect the Fed to deliver at least two rate cuts this year, with about 55 basis points of easing priced in for 2025.

"Any major changes to these (rate) bets could trigger heightened levels of volatility for the zero-yielding metal. A combination of geopolitical risk and Trump's tariff drama could keep gold bulls in the game," Otunuga said.

Spot silver retreated 0.7% to US$31.62 an ounce, platinum added 0.2% to US$967.30 and palladium firmed 0.1% to US$927.50.

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