Gold Prices Steady as Markets Weigh Fed’s Hawkish Stance, Trade War Risks

Gold prices held steady in Asian trading on Thursday, as investors evaluated the Federal Reserve’s firm stance on interest rates alongside rising uncertainty over U.S. tariffs.

• Spot gold (XAU/USD) edged 0.1% higher to $2,765.64 per ounce.
• Gold futures (February contract) climbed 0.3% to $2,803.39 per ounce by 01:45 ET (06:45 GMT).

Key Market Drivers

1. Federal Reserve’s Hawkish Outlook Weighs on Gold

• The Fed left interest rates unchanged, with Chair Jerome Powell signaling no imminent rate cuts.
• Policymakers reiterated their commitment to keeping monetary policy restrictive until inflation shows sustained movement toward the 2% target.
• Higher interest rates traditionally weigh on non-yielding assets like gold, making them less attractive compared to interest-bearing investments.
• The U.S. Dollar Index remained steady, limiting gold’s upside potential.

2. U.S. Trade Tariff Uncertainty Boosts Safe-Haven Appeal

• Trump’s aggressive tariff plans—including 25% levies on imports from Canada and Mexico starting February 1—have raised concerns about trade tensions and inflationary pressures.
• Analysts believe safe-haven demand for gold could increase if tariff escalations lead to heightened market volatility.

Other Precious Metals Gain

• Platinum futures climbed 1.1% to $993.75 per ounce.
• Silver futures rose 1% to $31.70 per ounce.

Market Outlook

With sticky inflation, a strong dollar, and persistent trade uncertainties, gold traders remain cautious. While higher interest rates limit gains, safe-haven demand could provide support if geopolitical risks escalate.