Gold prices held steady in Asian trading on Wednesday following a sharp decline in the previous session, as reduced geopolitical tensions and a stronger U.S. dollar curbed safe-haven demand, with investors looking ahead to new signals on the Federal Reserve’s policy direction.
Spot gold rose 0.1% to $4,884.16 an ounce as of 20:24 ET (01:24 GMT), while U.S. gold futures slipped 0.1% to $4,899.91.
Trading activity in Asia remained subdued due to Lunar New Year holidays across several key regional markets, keeping price movements limited.
The precious metal had fallen more than 2% on Tuesday amid improved risk sentiment following indications of progress in U.S.–Iran negotiations. Both sides reportedly reached an understanding on key “guiding principles,” boosting optimism for a diplomatic breakthrough and reducing demand for bullion as a safe-haven asset.
Gold’s earlier losses were amplified by a firmer dollar, which makes the metal costlier for holders of other currencies, as well as diminishing expectations of imminent U.S. rate cuts. The U.S. Dollar Index rose 0.1% during Asian hours after gaining 0.3% in the previous session.
Investors remained cautious ahead of the release of minutes from the Federal Reserve’s January meeting, due later in the day, which may provide further clarity on the timing and extent of potential policy easing.
Attention is also focused on Friday’s U.S. personal consumption expenditures (PCE) price index for December—the Fed’s preferred measure of inflation—which could significantly influence rate expectations.
Generally, higher interest rates tend to pressure non-yielding assets like gold, while expectations of monetary easing typically lend support to prices.
Sources: Ayushman Ojha
THE ETERNAL SOVEREIGN 
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