Gold prices remained largely steady during Asian trading on Tuesday, following a more than 1% decline the previous day as the U.S. dollar surged ahead of the Federal Reserve’s upcoming interest rate decision.
Spot gold (XAU/USD) held steady at $2,740.19 per ounce, while February Gold futures edged up 0.2% to $2,770.22 an ounce as of 01:31 ET (06:31 GMT).
The drop in gold prices on Monday was attributed to a global sell-off in technology stocks, driven by the breakout success of Chinese AI startup DeepSeek, which prompted traders to cover margins, according to ING analysts.
“Nevertheless, gold remains up over 4% this year, and we anticipate that trade frictions and geopolitical concerns will push prices to new record highs in 2025,” the analysts noted.
Investors cautious as Fed meeting nears, dollar strengthens
Market sentiment remained cautious ahead of the Federal Reserve’s policy meeting later this week, with lingering uncertainty surrounding U.S. tariffs further weighing on investors.
While the Fed is widely expected to maintain interest rates on Wednesday, its outlook on inflation and future monetary policy will play a crucial role in shaping market trends.
The U.S. Dollar Index rose 0.5% during Asian trading on Tuesday after President Donald Trump reiterated his push for higher universal tariffs, which could exceed 2.5% and potentially reach as high as 20%.
The dollar’s rally was further supported by DeepSeek’s advancements in AI, which triggered a sell-off in U.S. tech stocks and enhanced the greenback’s appeal as a safe-haven asset.
A stronger dollar generally exerts downward pressure on gold prices, as it makes the metal more expensive for buyers using other currencies.Other precious metals declined under pressure from a stronger dollar. Platinum futures slipped 0.7% to $954.75 an ounce, while silver futures edged 0.1% lower to $30.378 an ounce.
Copper slides on U.S. tariff concerns and weak Chinese demand
Copper prices continued to decline on Tuesday as the dollar strengthened and uncertainty surrounding U.S. tariff policies under President Trump weighed on the metal.
Adding to the bearish sentiment, weak Chinese factory activity data released on Monday signaled a subdued demand outlook for industrial metals.
Benchmark copper futures on the London Metal Exchange dropped 0.6% to $9,043.50 per ton, while February copper futures posted a modest 0.2% gain to $4.250 per pound.
