Gold prices edged lower on Wednesday after reaching a record high in the previous session, as Federal Reserve Chair Jerome Powell’s hawkish remarks reinforced expectations of slower interest rate cuts this year. Investors now await a key U.S. inflation report for further direction.

Spot gold slipped 0.1% to $2,895.38 per ounce by 0232 GMT, retreating from its all-time high of $2,942.70 on Tuesday. U.S. gold futures fell 0.4% to $2,922.40.

Powell stated on Tuesday that the economy remains strong, and the Fed is not in a hurry to cut interest rates further. However, he emphasized that rate adjustments could occur if inflation declines or the job market weakens.

Gold is often viewed as a hedge against inflation, but higher interest rates reduce its appeal as a non-yielding asset.

“There is an element of profit-taking on gold following its all-time highs and ahead of the next batch of U.S. inflation data, which shapes as a possible risk event for the precious metal if core CPI happens to produce an upside beat,” said Tim Waterer, chief market analyst at KCM Trade.

The U.S. Consumer Price Index (CPI) report is set for release at 1330 GMT, with Producer Price Index (PPI) data following on Thursday. Powell is also scheduled to testify before Congress later in the day.

Meanwhile, trade tensions escalated after Mexico, Canada, and the European Union condemned U.S. President Donald Trump’s decision to impose tariffs on all steel and aluminum imports starting next month, raising fears of a broader global trade war.

“The bullish trend in gold remains intact given the tariff picture uncertainty and the resulting safe-haven flows, which could keep underpinning the precious metal,” Waterer added.

In other metals, spot silver remained steady at $31.83 per ounce, platinum was unchanged at $983.15, and palladium inched up 0.3% to $978.75.