Powell said it’s still appropriate to keep rates on hold. “We’re in the right place to wait and see how things evolve,” he said during a press conference Wednesday. Fed officials voted unanimously to keep the benchmark federal funds rate in a range of 4.25% to 4.5%, where it has been since December. 

“If the large increases in tariffs that have been announced are sustained, they’re likely to generate a rise in inflation, a slowdown in economic growth and an increase in unemployment,” Powell said. 

The dollar pushed higher after Powell’s comments, keeping the downward pressure on bullion, which is priced in the greenback. Powell’s downplay of rate cuts is negative for gold as it typically benefits in a lower-rate environment. 

Bullion earlier tumbled by as much as 2.1% after China and the US confirmed upcoming trade talks, easing demand for safe havens.

Still, the precious metal has climbed about 28% this year, with investors seeking refuge amid widespread market chaos unleashed by Trump’s aggressive trade and geopolitical policies. It hit a record above $3,500 an ounce in April, before losing some ground in recent weeks. The ascent has also been driven by speculative demand in China and central-bank purchases.

Spot gold fell 1.7% to $3,373.04 an ounce as of 3:28 p.m. in New York. The Bloomberg Dollar Spot Index was up 0.5%. Silver, platinum and palladium all slipped.