Gold Holds Steady After Fed Decision

30 Jan 2025 , 10:06 AM

The Federal Reserve’s decision to keep interest rates unchanged provided little insight into the direction of U.S. monetary policy this year, which is why gold prices remained flat in early Asian hours on Thursday.

Spot gold was barely changed at $2,671.79 per ounce. At $2,774.50, U.S. gold futures increased by 0.2%.

Jerome Powell, the chair of the U.S. Federal Reserve, stated that the Fed would not lower interest rates further until it saw indications of either labor market weakness or additional progress on inflation.

The appeal of non-yielding bullion is diminished by higher interest rates.

After lowering the benchmark rate by a whole percentage point in 2024, the Fed’s rate decision on Wednesday was highly anticipated.

Following the White House’s announcement that he still intends to impose heavy tariffs on Canada and Mexico on Saturday and is “very much” considering imposing some on China over the weekend, traders also took in U.S. President Donald Trump’s most recent tariff threats.

The Fed may maintain rates higher for longer as a result of Trump’s plans, which are also seen as inflationary, which would reduce the attraction of gold as an inflation hedge.

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