Powell's comments dash rate-cut prospects, cutting gold from record highs

Gold prices retreated on Wednesday from an all-time high hit in the previous session, as Federal Reserve Chair Jerome Powell's hawkish comments cemented views of slower rate cuts this year, while investors awaited a key U.S. inflation report.

Spot gold was down 0.1% at $2,894.69 per ounce by 0722 GMT. U.S. gold futures eased 0.5% to $2,919.00. Bullion climbed to a record high of $2,942.70 on Tuesday.

Powell said on Tuesday the economy is in a good place and the Fed isn't rushing to cut interest rates further, but is prepared to do it if inflation drops or the job market weakens.

Bullion is considered a hedge against inflation, but higher interest rates dampen the non-yielding asset's appeal.

"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 due at 1330 GMT later in the day. The CPI likely rose 0.3% in January, following a 0.4% gain in the prior month, a Reuters poll showed.

Investors are closely watching for the Producer Price Index (PPI) data due on Thursday and Powell is also due to testify before Congress later in the day.

U.S. President Donald Trump's planned 25% tariffs on steel and aluminum imports would pile on top of other levies on Canadian goods, resulting in a total 50% tariff if threatened duties on all imports from Canada are enacted in March, a White House official said on Tuesday.

"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 said.

Spot silver rose 0.2% to $31.90 per ounce, platinum gained 0.5% to $988.00 and palladium firmed 0.3% to $978.48.