Gold prices remained stable on Wednesday, as investors awaited further developments from peace talks between the U.S. and Russia, following the Trump administration’s agreement to engage in more discussions on ending the war in Ukraine.
Spot gold steadied at $2,938.13 per ounce as of 0831 GMT, remaining just $4 below its all-time high of $2,942.70, reached last week. U.S. gold futures rose by 0.2%, reaching $2,956.20.
Ajay Kedia, director at Kedia Commodities in Mumbai, remarked, “Gold’s upside remains capped after the first round of talks between the U.S. and Russia ended with no clear path forward. However, if a solid peace plan emerges, it could be negative for gold.” He further stated that technical profit-booking could occur, with the war premium likely to erode, limiting gold's upside to around $2,970 resistance and support at $2,890.
The U.S. administration announced on Tuesday that it would continue holding talks with Russia on ending the Ukraine war after the initial peace discussions concluded without direct involvement from Kyiv or Europe.
Gold is traditionally viewed as a hedge against rising inflation and geopolitical uncertainty, and this is proving true again as market participants closely watch these developments.
Looking ahead, market participants are also awaiting the release of the Federal Reserve’s January meeting minutes later in the day for insights into the U.S. central bank’s interest rate outlook for this year.
Analysts at ANZ noted that “Trump’s presidency is creating macroeconomic and geopolitical uncertainties that are likely to prompt investors to diversify into gold.” In addition, Trump has indicated plans to impose tariffs on automobiles, potentially around 25%, as well as similar duties on semiconductors and pharmaceuticals, which analysts fear could weigh on the broader market. UBS analyst Giovanni Staunovo added that tariffs on cars could negatively impact sentiment for the white metals, such as silver and platinum.
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