Kuala Lumpur: The gold futures contract on Bursa Malaysia Derivatives has taken a breather after its recent sharp surge, as concerns over United States (US) President Donald Trump's tariff policies have eased.

According to BERNAMA News Agency, SPI Asset Management managing partner Stephen Innes noted that many now believe the tariffs may not be as harsh as initially feared. He mentioned that the market's focus is increasingly shifting toward next week's Personal Consumption Expenditures (PCE) data. If the data registers at 0.2 per cent or lower, it could signal the start of a new, lower inflation cycle. This potential shift might prompt a change in the US Federal Reserve (Fed) guidance towards a more dovish stance, which would likely be bullish for gold.

Innes also stated that the possibility of higher inflation figures could tilt the Fed's policy in the opposite direction, adding a layer of uncertainty that is currently fueling debate in the markets. He added that the unresolved nature of Trump's tariff plans continues to inject a measure of caution among investors, making the outlook for gold particularly contingent on these unfolding economic and political narratives.

The spot month January 2025's contract fell to US$2,743.50 per troy ounce from US$2,760.20 per troy ounce on Wednesday, and February 2025 decreased to US$2,752.50 from US$2,769.10 per troy ounce previously. The March 2025, April 2025, and June 2025 contracts closed weaker at US$2,762.90 from US$2,777.20 per troy ounce previously.

Trading volume eased to 28 lots from 39 on Wednesday, while open interest declined to 44 contracts from 61 contracts previously. According to the London Bullion Market Association's afternoon fix on Jan 22, the physical gold price stood at US$2,751.80 per troy ounce.