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Gold prices steadied in Asian trade on Thursday after two consecutive days of gains, supported by safe-haven demand amid uncertainty over a hawkish Federal Reserve and concerns about President-elect Donald Trump’s potential trade tariff policies.
Spot gold dipped slightly by 0.1% to $2,660.36 an ounce, while February gold futures gained 0.2% to $2,678.60 an ounce as of 05:11 GMT.
Gold Gains from Safe-Haven Demand
Bullion prices benefited this week from economic uncertainty and geopolitical risks. A CNN report suggesting Trump might declare a national economic emergency to implement universal trade tariffs intensified market jitters, bolstering demand for gold.
The Federal Reserve’s December meeting minutes also revealed growing concerns among policymakers about persistent inflation, potentially exacerbated by Trump’s expansionary and protectionist policies.
The Fed has scaled back its rate-cut projections for 2025, now expecting only two reductions instead of four. This slower pace of easing, coupled with rising Treasury yields and a strengthening dollar, has posed challenges for non-yielding assets like gold.
Mixed Performance in Precious Metals
Other precious metals showed a mixed performance:
- Platinum futures fell 0.1% to $983.75 an ounce.
- Silver futures rose 0.3% to $30.785 an ounce, outperforming gold in recent sessions.
Copper Advances on Stimulus Hopes
Industrial metals, particularly copper, saw gains, with March copper futures rising 0.6% to $4.2927 a pound, while benchmark copper on the London Metal Exchange climbed 0.4% to $9,053.50 a ton.
Weak inflation data from China, the world’s largest copper importer, fueled expectations of additional stimulus measures from Beijing. The country’s consumer price index was flat in December, and producer price index inflation contracted for the 27th consecutive month, highlighting persistent disinflationary pressures.
Although Beijing implemented aggressive stimulus policies in late 2024, Thursday’s inflation figures suggest that further fiscal support may be necessary to bolster economic growth.
Gold’s performance will likely remain tied to safe-haven demand amid ongoing economic and geopolitical uncertainties, while higher interest rates pose a headwind. For industrial metals, China’s policy direction will remain a key factor, with further stimulus likely supporting copper prices in the near term.
