Gold holds steady with focus on Donald Trump's policies

Gold is considered a safe investment amid economic and geopolitical turmoil, but higher interest rates reduce bullion's appeal as it yields no interest.

Gold prices were little changed on Thursday, as market participants awaited further clarity on policies from U.S. President Donald Trump's administration.

Spot gold eased 0.1% to $2,753.14 per ounce by 0852 GMT, trading in a tight range of $8. Prices hit their highest since October 31 on Wednesday.

U.S. gold futures GCcv1 shed 0.4% to $2,760.40.

"Spot prices are flirting with technically overbought conditions, which suggests that a slight technical pullback is due," said Exinity Group chief market analyst Han Tan.

The Relative Strength Index is at 67, suggesting that gold price is approaching the "overbought" territory starting at 70.

"Gold is set to take further strides towards the psychological $3,000-mark if President Trump's policies in turn boost demand for inflation hedges and safe havens," Tan said.

Trump has proposed imposing tariffs of about 25% on Canada and Mexico, and 10% on China starting February 1. He also mentioned potential tariffs on European imports, but did not provide specific details.

Gold is considered a safe investment amid economic and geopolitical turmoil, but higher interest rates reduce bullion's appeal as it yields no interest.

The Federal Reserve will meet on Jan. 28-29 amid steady economic growth and falling inflation, but is likely to face uncertainty from Trump's proposed policies.

Traders expect a 96% chance that the U.S. central bank will keep its benchmark interest rate unchanged, according to the CME Group's FedWatch Tool.

Investors will also monitor the Bank of Japan's rate decision on Friday and the European Central Bank's decision next week.

Spot silver XAG= dropped 0.7% to $30.59 per ounce and platinum XPT= shed 0.1% to $945.35. Palladium XPD=, however, added 1% at $987.30.