Gold prices remained largely unchanged during Tuesday’s Asian trading session, following a sharp decline of over 1% the previous day. The market’s focus shifted to the U.S. dollar, which surged in anticipation of the Federal Reserve’s interest rate decision later this week.

Spot gold (XAU/USD) stayed steady at $2,740.19 per ounce, while gold futures for February delivery edged up by 0.2%, trading at $2,770.22 an ounce as of 06:31 GMT.

Monday’s decline in gold prices was attributed to a broad sell-off in technology stocks, driven by the breakout success of Chinese AI startup DeepSeek. According to analysts at ING, the tech-induced market turbulence prompted traders to cover margins, putting pressure on the yellow metal.

Despite the recent dip, gold has gained over 4% this year, with analysts predicting further upside amid ongoing geopolitical tensions and trade uncertainties.

Investor Sentiment Wavers as Dollar Gains Ground

Investors remained cautious ahead of the Federal Reserve’s policy announcement, expected on Wednesday. While markets widely anticipate the central bank will maintain current interest rates, its outlook on inflation and future monetary policy is set to influence sentiment.

The U.S. Dollar Index climbed 0.5% in Asian trading, fueled by President Donald Trump’s renewed call for universal tariffs that could potentially range from 2.5% to as high as 20%. The dollar’s rally was further supported by concerns over DeepSeek’s advancements, which triggered a sell-off in U.S. technology shares, enhancing the greenback’s appeal as a safe-haven asset.

A stronger dollar typically weighs on gold prices, as it increases the cost of the metal for buyers using other currencies.

Impact on Other Precious and Industrial Metals

The dollar’s strength also pressured other precious metals. Platinum futures declined 0.7% to $954.75 an ounce, while silver futures slipped 0.1% to $30.378 an ounce.

Copper prices faced additional headwinds, falling amid dollar strength and lingering concerns over U.S. tariff policies. Benchmark copper futures on the London Metal Exchange dropped 0.6% to $9,043.50 per ton, while February copper futures inched up by 0.2% to $4.250 per pound. Weak Chinese factory activity data released earlier added to worries about demand for industrial metals.