Gold prices traded moderately higher during Asian trade on Tuesday, protected by safe-haven appeal despite a recovery in the United States dollar as investors anticipated the much-awaited U.S.-Russia bilateral talks in Saudi Arabia.
By 4:10 pm AEDT (5:10 am GMT) spot gold was up by $13.51 or 0.5% to US$2,912 per ounce.
Top U.S. and Russian officials are set to meet to discuss a potential resolution to the Ukraine conflict. However, uncertainty lingers as European and Ukrainian leaders are excluded from the discussions.
This cautious mood has supported safe-haven demand for the U.S. dollar, limiting gold’s upside. Additionally, hawkish remarks from Federal Reserve policymakers, stressing prudence on inflation and rate cuts, have reinforced Treasury yields and bolstered the greenback.
Fed Governor Michelle Bowman cautioned that rising asset prices may have hindered inflation progress, while Governor Christopher Waller noted that inflation has been "excruciatingly slow" to decline over the past year.
Philadelphia Fed President Patrick Harker stated that current economic conditions support a steady policy stance for now.
Investors will watch speeches from Fed officials Mary Daly and Michael Barr for further policy clues ahead of the release of the Fed’s January meeting minutes.
Meanwhile, Goldman Sachs revised its 2025 year-end gold price target to $3,100 per ounce, up from $2,890, citing sustained central bank demand.
The bank expects structurally higher central bank demand to add 9% to gold prices, along with a gradual increase in ETF holdings as the Fed eases rates. This should offset any downside from reduced investor positioning if market uncertainty diminishes.
