Gold inches lower as dollar rises, Fed meeting in focus

Gold prices edged lower in early Asian hours on Monday as the dollar gained, while investors awaited more guidance on interest rate decision from the U.S. Federal Reserve‘s first meeting of 2025 later this week.

FUNDAMENTALS

* Spot gold was down 0.1% to $2,768.01 per ounce, as of 0046 GMT. U.S. gold futures shed 0.2% to $2,772.70.

* The dollar was up 0.2%, making gold expensive for foreign buyers.

* U.S. Fed policymakers are expected to keep rates on hold in the current 4.25%-to-4.50% range in their Jan. 28-29 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. 17-18 has kept intact the core view among Fed officials that inflation will continue to move steadily, if slowly, towards 2%, with a low unemployment rate and continued hiring and economic growth. * 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 U.S. military aircraft with migrants being deported.

* SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings fell 0.47% to 860.17 tonnes on Friday from 864.19 metric tons 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% lower to $30.52 per ounce, palladium dropped 0.8% to $979.72 and platinum fell 0.4% to 945.20.

DATA/EVENTS (GMT) 0130 China NBS Manufacturing PMI Jan 0500 Japan Leading Indicator Revised Nov 0900 Germany Ifo Business Climate New, Ifo Curr Conditions New, Ifo Expectations New Jan 1100 France Unemp Class-A SA Dec 1500 US New Home Sales-Units Dec