Gold Prices Steady as Markets Await Fed Decision Amid Trade Policy Uncertainty
Gold prices remained largely unchanged in Asian trading on Wednesday as investors braced for the Federal Reserve’s policy decision and navigated uncertainty surrounding U.S. trade policies under President Donald Trump’s administration.
Spot gold held steady at $2,762.64 per ounce, while gold futures for February delivery edged up 0.1% to $2,796.06 an ounce by 01:22 ET (06:22 GMT).
Fed Meeting, Trump Tariff Concerns, and China Holiday Keep Bullion Muted
Market sentiment remained cautious ahead of the Fed’s two-day meeting conclusion, where policymakers are widely expected to keep interest rates unchanged but may provide key insights into inflation risks and the potential timeline for rate cuts in 2025.
Adding to investor concerns, Trump’s renewed push for aggressive tariffs on imports—including steel, aluminum, and pharmaceuticals—has heightened fears of inflationary pressures and an escalating trade war. The former president is expected to implement a 25% tariff on imports from Canada and Mexico starting February 1, with possible additional levies on Chinese goods.
Analysts also pointed to China’s Lunar New Year holiday as a contributing factor to subdued market activity.
If the Fed signals a dovish stance, gold prices could surge to new record highs, supported by safe-haven demand amid ongoing trade uncertainties.
Lower interest rates typically favor gold, making the non-yielding metal more attractive compared to interest-bearing assets.
Currency & Precious Metals Overview
The U.S. Dollar Index dipped 0.1% in Asian trading on Wednesday, following a 0.5% surge on Tuesday.
Other precious metals also saw limited movement:
- Platinum futures remained unchanged at $958.25 an ounce
- Silver futures held steady at $30.848 an ounce>
Copper Extends Losses as Industrial Metals Weaken Amid Tariff Concerns - Copper prices continued to decline on Wednesday as markets reacted to President Donald Trump’s proposed import tariffs on industrial metals.
- “Tariff threats are unlikely to boost sentiment, with reports indicating that Trump is set to impose tariffs on steel, aluminum, and copper imports,” ING analysts noted.
- Adding to the pressure, China’s slowing factory activity and persistent property sector struggles have further dampened the demand outlook. January manufacturing data showed contraction after three months of expansion.
- On the London Metal Exchange, benchmark copper futures slipped 0.3% to $8,995.90 per ton, while February copper futures dropped 0.7% to $4.2197 per pound.
