Mumbai : Gold prices held steady on Tuesday as investors awaited the outcome of the U.S. Federal Reserve’s policy meeting, while optimism about progress in U.S.-China trade relations limited demand for the precious metal as a safe haven.

Spot gold edged up by 0.2 percent to around 3,957 dollars per ounce, while U.S. gold futures slipped slightly to 3,971 dollars. Analysts said the market is anticipating a small interest rate cut of 0.25 percent by the Federal Reserve, which could support gold in the coming sessions by lowering the opportunity cost of holding non-yielding assets.

Despite this, traders showed caution as positive signals emerged from talks between Washington and Beijing, reducing the immediate appeal of gold as a refuge from uncertainty. Stronger risk appetite in the equity markets and a firmer U.S. dollar also capped gold’s advance.

Gold has climbed more than 50 percent since the start of 2025, hitting a record high of 4,381 dollars on October 20. However, after the recent rally, investors have begun taking profits, leading to moderate price declines in recent days.

Analysts noted that while short-term factors such as profit-taking and easing geopolitical tensions are limiting further gains, the long-term outlook for gold remains positive. Expectations of interest rate cuts, persistent inflation worries, and potential economic slowdowns continue to support the metal’s broader appeal.

In India, domestic gold prices mirrored global movements, slipping as much as 1,140 rupees per 10 grams in the latest session. Experts believe the correction could attract new buyers during the festive season, as lower prices often boost jewelry demand.

Looking ahead, gold is expected to remain sensitive to both the Federal Reserve’s monetary policy stance and global trade developments. A decisive rate cut or any renewed geopolitical uncertainty could once again lift gold toward recent record levels, while sustained optimism in financial markets may keep prices in check in the short term.