Gold prices fell in Asian trading on Tuesday but remained close to record levels, as demand for the yellow metal was supported by fears of an imminent military conflict in the Middle East.

• Markets also turned risk-averse ahead of key U.S. inflation data this week, which could impact expectations for interest rate cuts.

• Gold continued to show upward buying momentum due to expectations of U.S. interest rate cuts, with a weaker inflation report widely anticipated to support this trend.

• Spot gold fell by 0.4% to $2,460.78 an ounce, while gold futures expiring in December declined by 0.1% to $2,501.45 an ounce. Gold futures hit a record high of $2,517.10 an ounce, while spot prices remained close to the record high of $2,483.78 an ounce.

• This week’s focus is entirely on the U.S. Consumer Price Index data, scheduled for release on Wednesday. The report is expected to show a slight decrease in inflation for July.

• Any additional signs of cooling inflation would provide the Federal Reserve with a stronger justification for cutting interest rates, especially amid growing concerns that the U.S. economy may be heading for a recession.

• Markets are divided on whether there will be a 25 or 50-basis point cut in September, and Wednesday’s inflation data is likely to offer more clarity on the potential cut.

• Beyond the inflation data, industrial production and retail sales figures are also set to provide further insights into the world’s largest economy this week.

• On the other hand, broader precious metal prices fell on Tuesday but achieved some gains this week. Platinum futures dropped by 0.7% to $942.60 an ounce, while silver futures decreased by 0.8% to $27.773 an ounce.

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