GOLD prices edged lower in early Asian hours on Monday (Jan 27) as the US dollar gained, while investors awaited more guidance on interest rate decision from the US Federal Reserve’s first meeting of 2025 later this week.
Spot gold was down 0.1 per cent to US$2,768.01 per ounce, as at 0046 GMT. US gold futures shed 0.2 per cent to US$2,772.70.
The US dollar was up 0.2 per cent, making gold expensive for foreign buyers.
US Fed policymakers are expected to keep rates on hold in the current 4.25 to 4.5 per cent range in their Jan 28 to 29 meeting but the larger story unfolding will be how the central bank confronts early moves by President Donald Trump that are likely to shape the economy this year, including demands the Fed continue lowering borrowing costs.
The Fed cut the benchmark rate a full percentage point last year.
Data since the Fed’s last meeting on Dec 17 to 18 has kept intact the core view among Fed officials that inflation will continue to move steadily, if slowly, towards 2 per cent, with a low unemployment rate and continued hiring and economic growth.
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Gold’s appeal as an inflation hedge may be diminished if Trump’s policies, which are seen as inflationary, lead the Fed to maintain rates higher for longer.
Meanwhile, Trump said on Sunday he will impose sweeping retaliatory measures on Colombia, including tariffs and sanctions, after the South American country turned away two US military aircraft with migrants being deported.
SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings fell 0.47 per cent to 860.17 tonnes on Friday from 864.19 metric tonnes on Thursday.
Comex gold speculators raised net long position by 21,864 contracts to 234,358 in the week to Jan 21, data showed.
Spot silver was 0.3 per cent lower to US$30.52 per ounce, palladium dropped 0.8 per cent to US$979.72 and platinum fell 0.4 per cent to 945.20. REUTERS
