An employee holds one kilogram gold bullion at the YLG Bullion International Co. headquarters in Bangkok, Thailand, on Dec. 22, 2023. - Photographer: Chalinee Thirasupa/Bloomberg
Gold steadied on Thursday after a more than 1% fall earlier in the session, with concerns over the U.S. Federal Reserve's independence countering easing geopolitical risks after President Donald Trump retreated from EU tariff threats.
Spot gold was steady at $4,836.09 per ounce, as of 0740 GMT, after scaling a record peak of $4,887.82 in the previous session.
U.S. gold futures for February delivery also traded flat at $4,838.60 per ounce.
"The market was reacting after Trump's remarks, but the concerns are still lingering, and that's protecting the downside for both gold and silver, along with concerns surrounding the independence of the Fed," said ANZ commodity strategist Soni Kumari.
Trump on Wednesday abruptly stepped back from using tariffs to pressure Denmark over Greenland, ruled out the use of force, and signalled a possible deal to end a dispute that had threatened the worst transatlantic rift in decades.
Speaking to CNBC in Davos, he also indicated he was close to choosing a new chair for the Fed, adding that he liked the idea of keeping White House economic adviser Kevin Hassett in his current post as a Fed Governor.
Meanwhile, U.S. Supreme Court justices during arguments over Trump's bid to fire Fed Governor Lisa Cook seemed to embrace the idea that the central bank's independence to set monetary policy must be preserved.
Traders await November's Personal Consumption Expenditures (PCE) data and weekly jobless claims due later on Thursday for more clues on the Fed's policy outlook.
The U.S. Fed is broadly expected to maintain interest rates steady at its January meeting despite Trump's calls for cuts.
Gold, which does not yield interest, typically performs well in a low-interest-rate environment.
Goldman Sachs raised its gold price forecast for December 2026 to $5,400 from $4,900/oz previously.
The brokerage said it expects central banks to buy an average of 60 tons of gold in 2026 as emerging economies continue diversifying reserves.
Spot silver rose 1.1% to $94.26 an ounce, after hitting a record high of $95.87 on Tuesday.
Spot platinum lost 0.4% to $2,472.33 per ounce after touching a record peak of $2,511.80 on Wednesday, while palladium gained 0.6% to $1,850.31. - Reuters
