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Gold cut early losses on Monday as investors looked forward to Donald Trump’s inauguration speech for clarity on the incoming administration’s policies, which could offer further clues on the Federal Reserve’s interest rate path.

Spot gold was down 0.1% at $2,697.60 per ounce, as of 0300 GMT, after falling 0.5% earlier in the day. US gold futures dropped 0.3% to $2,740.10.

“Gold has been on the receiving end of selling pressure today, but the precious metal’s status as a traditional safe-haven asset should limit the immediate downside,” said Tim Waterer, chief market analyst at KCM Trade.

“If we happened to hear a more conciliatory or softer tone from President Trump regarding trade and tariff polices, this could alleviate inflationary concerns, which may see the US dollar and Treasury yields recede, and gold is potentially one asset which could benefit from this scenario.”

Market players were keenly awaiting Trump’s inauguration later in the day, and his broad trade tariff policies are expected to further ignite inflation and trigger trade wars, potentially increasing bullion’s safe-haven appeal.

Gold is used as an inflation hedge, but higher interest rates dampen its appeal.

It also serves as a safe-haven asset. The future path of US interest rates will depend on how aggressively the incoming administration follows through on Trump’s policy pledges.

The Federal Reserve will likely hold interest rates steady on Jan. 29 and resume cutting in March, according to a slim majority of economists polled by Reuters.

Elsewhere, Hamas released three Israeli hostages and Israel released 90 Palestinian prisoners on Sunday, the first day of a ceasefire suspending a 15-month-old war that has devastated the Gaza Strip and inflamed the Middle East.

Gold prices inch down

Spot silver fell 0.6% to $30.16 per ounce, palladium steadied at $947.99 and platinum shed 0.2% to $940.84.

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