Gold prices remained flat in early Asian trading on Thursday after the U.S. Federal Reserve held interest rates steady, offering little clarity on the monetary policy outlook for the year.

Market Overview

• Spot gold held steady at $2,671.79 per ounce as of 0049 GMT.
• U.S. gold futures edged up 0.2% to $2,774.50 per ounce.

Key Drivers

• The Federal Reserve kept interest rates unchanged on Wednesday, with Chair Jerome Powell stating that the central bank will wait for further progress on inflation or signs of labor market weakness before considering rate cuts.
• Higher interest rates typically reduce the appeal of non-yielding assets like gold.
• The decision was widely expected after the Fed’s 2024 rate cuts, which had already lowered the benchmark rate by a full percentage point.

Geopolitical & Economic Factors

• Traders are digesting U.S. President Donald Trump’s latest tariff threats, with the White House confirming plans for steep tariffs on Mexico and Canada starting Saturday, and potential levies on China over the weekend.
• Analysts warn that such policies could drive inflation higher, potentially forcing the Fed to maintain elevated interest rates, dampening gold’s appeal as an inflation hedge.
• Meanwhile, the European Central Bank (ECB) is expected to cut interest rates later today.

Other Precious Metals

• Silver rose 0.2% to $30.85 per ounce.
• Platinum gained 0.7% to $952.49 per ounce.
• Palladium edged up 0.5% to $967.38 per ounce.

Upcoming Economic Data (GMT)

• 06:30 – France Q4 GDP (Preliminary)
• 09:00 – Germany Q4 GDP (Flash Estimate)
• 10:00 – Eurozone GDP (Preliminary), Consumer Confidence (Final), Unemployment Rate (Dec)
• 13:15 – ECB Interest Rate Decision
• 13:30 – U.S. Q4 GDP (Advance), Initial Jobless Claims (Jan 25)
• 15:30 – U.S. EIA Natural Gas Storage Report