Gold Prices Steady Amid Market Volatility as Investors Await Fed Decision

Gold prices remained stable on Wednesday, recovering slightly from a sharp decline earlier in the week, as uncertainty over U.S. trade tariffs bolstered demand for safe-haven assets. Investors are now focused on the Federal Reserve's policy meeting conclusion later in the day.

Market Performance

• Spot gold held steady at $2,765.35 per ounce as of 0108 GMT.
• U.S. gold futures edged up 0.2% to $2,772.10 per ounce.
• The metal had dropped more than 1% on Monday, marking its steepest decline since December 18, following market turbulence triggered by DeepSeek's low-cost AI model.

Key Market Drivers

• A selloff in global equities on Tuesday prompted risk-averse investors to shift towards gold.
• Former U.S. President Donald Trump announced plans to impose tariffs on aluminum, copper, and steel, aiming to incentivize domestic production.
• Trade tensions and economic uncertainty have historically supported gold prices due to its status as a safe-haven asset.
• Analysts warn that Trump’s tariff policies could contribute to inflation, potentially influencing the Fed’s interest rate strategy.

Federal Reserve Policy in Focus

• The Fed began its two-day policy meeting on Tuesday and is widely expected to hold interest rates steady, following 100 basis points of rate cuts from September to December.
• However, Trump has publicly called for lower borrowing costs, which could add pressure on policymakers.
• U.S. rate futures currently suggest nearly 50 basis points of rate cuts this year, with the first reduction anticipated in June.

Other Precious Metals

• Silver rose 0.1% to $30.43 per ounce.
• Palladium slipped 0.3% to $952 per ounce.
• Platinum edged down 0.2% to $940.10 per ounce.

Investors will be closely watching the Fed’s statement and Chair Jerome Powell’s comments for further clues on the central bank’s monetary policy trajectory.