Gold prices remained muted in Asian trading on Thursday as markets weighed the impact of a hawkish Federal Reserve policy stance and lingering uncertainty over U.S. tariffs.
XAU/USD edged up 0.1% to $2,765.64 per ounce, while Gold Futures for February delivery rose 0.3% to $2,803.39 per ounce by 01:45 ET (06:45 GMT).
Investors Weigh Fed Policy and Tariff Risks
The Federal Reserve held its benchmark interest rate steady, with Chair Jerome Powell signaling no immediate plans for rate cuts.
Fed officials reaffirmed their commitment to restrictive monetary policy until they are confident that inflation is sustainably moving toward the 2% target.
Higher interest rates typically weigh on gold prices, as they make interest-bearing assets more attractive than non-yielding gold.
With rates expected to stay elevated for longer, the U.S. dollar could strengthen, exerting downward pressure on gold. However, the U.S. Dollar Index was largely unchanged in Asian trading on Thursday.
Despite this, analysts suggest gold’s safe-haven appeal could provide support if trade tensions escalate, as aggressive tariffs may fuel inflation and market volatility.
Trump’s renewed push for tariffs on imports—including steel, aluminum, and pharmaceuticals—has heightened concerns. A 25% tariff on Canadian and Mexican imports is set to take effect on February 1, with additional tariffs on Chinese goods also under consideration.
Other Precious Metals Rise; Copper Faces Pressure
Other precious metals saw gains on Wednesday:
- Platinum Futures climbed 1.1% to $993.75 per ounce.
- Silver Futures advanced 1% to $31.70 per ounce.
Meanwhile, copper prices remained subdued as markets reacted to Trump’s proposed import tariffs on industrial metals.
“A prolonged trade conflict could slow global growth and weaken demand. Tariffs pose a significant headwind to metals, regardless of whether they are already in effect,” analysts at ING noted.
- Benchmark Copper Futures on the London Metal Exchange dipped 0.3% to $9,049.70 per ton.
- February Copper Futures slipped 0.5% to $4.2677 per pound.
