Gold prices held steady on Tuesday, anchored by stability in European equities and US stock futures, a day after bullion's sharp decline amid a tech-led selloff.
Spot gold was steady at $2,742.37 per ounce by 12:05 GMT. US gold futures rose 0.3% to $2,746.70.
"After the drop yesterday, with gold likely being used to cover losses in other asset classes, stable equity markets in Europe are keeping gold stable too," UBS analyst Giovanni Staunovo said, Reuters reported.
Gold fell over 1% on Monday, marking its steepest drop since Dec. 18, as investors rushed to liquidate bullion to offset losses triggered by a sharp pullback in technology stocks, spurred by DeepSeek's low-cost, low-power AI model, casting doubt on the dominance of traditional AI giants.
Investors' focus is now set upon the Federal Reserve's first meeting this year, scheduled to start later in the day.
Policymakers are expected to leave interest rates unchanged at the end of the two-day meeting.
However, US President Donald Trump saying he wants borrowing costs to be lowered cast some doubt over the independence of the Fed's decision.
"Market uncertainty should still support demand for gold over the coming months, we still look for higher prices later this year, driven also by further rate cuts by the Fed," Staunovo added.
Trump's policies, in addition to being perceived as inflationary, could potentially trigger trade wars, increasing safe-haven demand for bullion.
Gold prices look set for a record-breaking year due to heightened economic uncertainty and inflation concerns, a Reuters poll showed.
However, analysts downgraded their 2025 price forecasts for platinum and palladium as demand struggles to improve significantly.
Spot silver fell 0.1% to $30.17 per ounce, palladium was down by 0.1% to $959.75 and platinum also shed 0.1% to $946.05.
