Washington: Global gold prices fell on Tuesday after touching a three week high, as investors booked profits and the strengthening US dollar reduced demand for the precious metal.

Spot gold dropped to around 5,150 to 5,170 dollars per ounce after gaining strongly in the previous session. The metal had climbed more than two percent on Monday as investors sought safety amid trade tensions and market uncertainty.

Analysts said the latest decline was mainly due to profit taking by traders who moved to secure gains after the recent rally. A stronger US dollar also made gold more expensive for buyers using other currencies, which slowed demand.

Market sentiment improved slightly as Asian markets stabilized despite recent volatility on Wall Street. This reduced immediate demand for safe haven assets such as gold.

Ongoing global trade tensions continue to influence investor behaviour. US President Donald Trump has warned of possible tariff increases and urged countries to comply with trade agreements, adding to uncertainty in global markets.

Investors are also closely watching signals from the US Federal Reserve. Recent comments from Federal Reserve officials suggest interest rates could remain steady if economic data improves. Higher interest rates typically reduce the appeal of gold because it does not pay interest.

Other precious metals showed mixed movement. Silver and platinum declined, while palladium recorded a small gain.

Despite the drop, analysts say gold remains supported by global economic uncertainty, geopolitical tensions, and concerns about trade policy. These factors could keep prices elevated in the near future as investors continue to look for safe and stable assets.