Gold Holds Decline After Powell Flags Pause in Fed Easing Cycle

Gold prices held steady on Wednesday, as investors awaited the U.S. Federal Reserve's decision on interest rates due later in the day, while also focusing on U.S. President Donald Trump's trade policies following his tariff threats.
Spot gold eased 0.2% to $2,758.49 per ounce by 09:55 a.m. ET (1455 GMT), while U.S. gold futures rose 0.3% to $2,775.60, widening the premium over spot gold rates.
The Fed is scheduled to release its latest policy decision and statement at 2 p.m. EST (1900 GMT), with Fed Chair Jerome Powell due to hold a press conference half an hour later to elaborate on the meeting.
The U.S. central bank is widely expected to hold interest rates steady as it awaits further inflation and jobs data and more clarity on the economic impact of Trump's policies before deciding whether to cut borrowing costs again.
"However, the Fed's commentary in regards to the potential for an interest rate cut in the March meeting is going to be in focus," said David Meger, director of metals trading at High Ridge Futures.
Gold prices neared all-time highs last week after Trump called for lower interest rates. Bullion tends to thrive in a low-interest-rate environment as it yields no interest.
Prices, however, retreated sharply on Monday as a sell-off in technology stocks, driven by Chinese AI model DeepSeek, sparked a rush to liquidate bullion to counter losses.
The sell-off in the stock market seen on Monday may not be over and the unpredictability of Trump's policies is contributing to an increased demand for gold as a safe-haven, said Jim Wyckoff, a senior market analyst at Kitco Metals.
Nobody expects the Fed to move, but Treasury yields have been pricing in more cuts.
Trump still plans to make good on his promise to issue tariffs on Canada and Mexico, and his policies are widely seen as inflationary.
Elsewhere, spot silver gained 1.7% to $30.92 per ounce, platinum also added 0.5% to $946.45. Palladium was up 0.8% to $962.50.
Reporting by Anmol Choubey in Bengaluru; Editing by Vijay Kishore