Gold prices moved slightly higher on Tuesday as traders waited for this week’s U.S. Federal Reserve meeting. The upcoming decision is expected to influence market sentiment for the rest of the year.
By 08:50 ET (13:50 GMT), spot gold increased 0.2% to $4,199.20 per ounce. February gold futures also rose 0.3%, reaching $4,228.95 per ounce.
Although gold has shown some softness in early December, the metal remains supported after four straight months of strong gains. Expectations of lower U.S. interest rates have played a major role in that momentum.
Fed rate cut mostly priced in, but uncertainty remains
Markets widely expect the Federal Reserve to deliver a 25-basis-point rate cut at the end of its two-day meeting on Wednesday.
Bets on a cut strengthened after last week’s data showed the PCE price index — the Fed’s preferred inflation measure — cooled slightly in September.
However, analysts at OCBC warned that the chances of a “hawkish hold” have increased. The Fed will not have access to key economic data for October and November before making its decision, adding to the uncertainty.
Even so, the expectation of lower rates has continued to support gold. A drop in U.S. debt yields makes non-interest-bearing assets like gold more attractive to investors.
Silver holds near record highs
Spot platinum traded steady at $1,669.25 per ounce. Spot silver jumped 1.9% to $59.29 per ounce after touching a record high of $59.3474 per ounce last week.
Silver, often viewed as a safe-haven alternative to gold, has been lifted by growing speculation about tighter supplies in the coming years. The U.S. decision to classify silver as a critical mineral has also increased investor demand.
So far this year, silver has more than doubled in value. It has outperformed gold, as elevated bullion prices pushed many traders to seek cheaper haven exposure through silver.
