Gold Holds Steady Ahead of Fed Decision

28 Jan 2025 , 10:39 AM

As attention turned to the Federal Reserve’s first meeting of 2025 and investors attempted to ascertain how U.S. President Donald Trump’s policies would affect the central bank’s stance on inflation and growth, gold prices steadied Tuesday.

Spot gold remained stable at $2,742.49 per ounce. At $2,746.70, U.S. gold futures increased by 0.3%.

A sell-off in the market as a whole, sparked by investor interest in the Chinese AI startup DeepSeek, caused gold prices to drop more than 1% in the previous session.

At their rate-setting meeting, which begins later today and ends on Wednesday, U.S. policymakers are likely to keep interest rates constant; however, Trump could make it more difficult by stating last week that he wants the Fed to reduce borrowing costs.

As Trump starts his second term, investors will also pay attention to any indications about future policy choices, as tariff policies are expected to drive up inflation.

Despite currency strength and a less optimistic view for U.S. rate cuts, increased economic uncertainty and inflation fears under Trump’s most recent term are driving demand, which is expected to push gold prices to a record-breaking 2025.

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