Gold prices held steady in Asian trading on Wednesday, weighed down by a stronger dollar as concerns grew over slower monetary easing in 2025. U.S. economic data fueled expectations of slower rate cuts, especially with a resilient labor market. Treasury yields rose, and the dollar rebounded from a one-week low.
Gold saw limited safe-haven demand, even as tensions between the U.S. and China heightened, with fears of a global trade war and potential tariffs under President Trump. Spot gold remained unchanged at $2,649.47 per ounce, while February futures dropped 0.1% to $2,662.24.
The dollar stabilized after stronger-than-expected job data suggested a strong labor market, ahead of key nonfarm payrolls data later this week. Strong PMI data also raised concerns about persistent inflation, which may deter the Federal Reserve from cutting rates, negatively impacting gold. Hawkish Fed comments earlier this week supported this outlook.
Gold’s price movement was also influenced by rising Treasury yields, as higher yields make gold less attractive compared to yield-bearing assets. The persistent strength of the U.S. economy and inflationary pressures are expected to keep rates elevated for a longer period, diminishing the appeal of gold as an investment. Furthermore, concerns about a potential slowdown in global growth and geopolitical tensions did little to boost gold’s appeal as a safe haven.
