Gold prices declined on Wednesday due to profit-taking after recently reaching record highs, as investors remained attentive to the potential for peace talks following U.S. President Donald Trump’s administration’s agreement to engage in further discussions with Russia regarding the resolution of the war in Ukraine.
In the UAE, gold rates saw an upward trend, with 24-carat gold rising by AED2.25 to AED353. Similarly, 22-carat gold also gained AED2, reaching AED328.25. Additionally, 21-carat gold climbed AED2 to AED315.00, while 18-carat gold edged up by AED1.75 to AED270.
Spot gold decreased 0.2 percent to $2,928.52 an ounce as of 0338 GMT, just $14 short of its all-time high of $2,942.70 achieved last week. U.S. gold futures also fell by 0.1 percent to $2,945.90.
Trump’s administration announced on Tuesday that it would pursue additional discussions with Russia to conclude the war in Ukraine after the initial peace negotiations saw neither Kyiv nor Europe participating.
Bullion as a hedge against inflation
Bullion is traditionally viewed as a safeguard against rising inflation and geopolitical tensions. In the previous session, gold prices rose over 1 percent due to concerns about economic growth, stemming from uncertainties surrounding Trump’s tariff plans, which prompted safe-haven investments in bullion.
The market is now looking forward to the Federal Reserve‘s January meeting minutes, which are set to be released later in the day, to gain insights into the U.S. central bank’s interest rate direction for the year.
Market performance of other precious metals
Spot silver experienced a decline of 0.9 percent, settling at $32.57 an ounce. Platinum fell by 1.3 percent to $974.32, while palladium dropped 1.3 percent to $974.56.
On Tuesday, gold prices increased as the uncertainty regarding U.S. President Donald Trump’s tariffs continued to influence market sentiment, bolstering bullion’s status as a safe-haven asset amid concerns of a possible global trade war.
In the UAE, gold rates saw an upward trend, with 24-carat gold rising by AED1.25 to AED350.75. Similarly, 22-carat gold also gained AED1.25, reaching AED326.25. Additionally, 21-carat gold climbed AED1.25 to AED313.00, while 18-carat gold edged up by AED1.00 to AED268.25.
Recent gold prices and Fed commentary
Spot gold was reported up 0.1 percent at $2,898.99 as of 00:30 GMT, with U.S. gold futures gaining 0.4 percent to $2,912.60. U.S. Federal Reserve governor Michelle Bowman remarked on Monday that she wanted greater assurance that inflation would further decline this year before considering any interest rate cuts, especially given the uncertainty surrounding the Trump administration’s new trade policies.
Since assuming office, Trump has enacted a 10 percent tariff on Chinese imports, announced and postponed 25 percent tariffs on Mexican goods and non-energy imports from Canada, set a deadline for 25 percent tariffs on imported steel and aluminum, and intends to impose reciprocal tariffs on all countries that tax U.S. imports. Bullion continues to be regarded as a traditional hedge against inflation and geopolitical uncertainties.
Spot silver fell by 1.3 percent to $32.37 an ounce, while platinum gained 0.5 percent to $980.29, and palladium rose by 1.4 percent to $976.35.
