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Gold Prices Steady as U.S. Interest Rates Hold; Markets Brace for Key Decisions

Gold Prices Stabilize Amid Fed Decision on Interest Rates

Gold prices remained steady during the early hours of trading in Asia on Thursday, following the U.S. Federal Reserve’s decision to maintain interest rates at their current level. This announcement came without any definitive indications regarding the trajectory of U.S. monetary policy for the remainder of the year.

As of 00:49 GMT, gold was priced at $2,761.79 per ounce in spot transactions, while U.S. gold futures saw a slight increase of 0.2%, reaching $2,774.50 per ounce.

The Federal Reserve opted to keep rates unchanged, offering only limited commentary on potential future cuts, citing the ongoing decline in the unemployment rate, robust economic growth, and persistent inflation that exceeds target levels. Jerome Powell, the Fed Chair, indicated that the committee would closely monitor additional indicators related to inflation and labor market progress before considering any adjustments to interest rates.

High interest rates generally diminish the appeal of gold, which does not yield returns. The Fed’s pause was anticipated following three consecutive interest rate cuts last year, totaling a full percentage point.

Market participants have largely absorbed the implications of U.S. President Donald Trump’s threats to impose tariffs. The White House reiterated Trump’s intentions to implement significant tariffs on Mexico and Canada starting Saturday, with further tariffs on China under consideration for early next week.

Trump’s inflationary policies could compel the Federal Reserve to maintain higher interest rates for an extended period, subsequently affecting gold’s status as a safe haven asset.

In tandem, expectations have solidified that the European Central Bank will announce interest rate reductions later in the day.

Looking at other precious metals, silver experienced a 0.2% increase in spot transactions, reaching $30.85 per ounce. Platinum saw a rise of 0.7%, reaching $952.49, while palladium increased by 0.5%, priced at $967.38 per ounce.

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