Gold prices began to decline early Monday morning in Asia due to the strengthening dollar, and investors are closely monitoring the first meeting of the U.S. Federal Reserve in 2025 to receive guidance on interest rate decisions.
According to this data, gold in local markets decreased by 0.1% to $2,768.01 per ounce at 00:46 GMT. The drop is taking place as the Federal Reserve will manage economic changes associated with the initial steps of President Donald Trump's administration, including calls for continued rate cuts.
Analysts expect that Fed members will maintain the current range of interest rates from 4.25% to 4.50% during the meeting on January 28-29. Attention is also given to how the Fed will react to the economic situation based on Trump's actions and his policy of lowering rates.
Data received from the previous Fed meeting on December 17-18 indicates that inflation is trending moderately but steadily towards the 2% target, supported by low unemployment levels and stable economic growth. In such conditions, the status of gold as a hedge against inflation may be challenged by issues in the event that Trump's proposed inflationary policy compels the Fed to keep rates high for an extended period.
In the geopolitical sphere, President Trump announced plans for the introduction of retaliatory tariffs and sanctions against Colombia after the country banned two American military aircraft returning deported migrants to its territory.
