Gold bullion on the graph as crisis safe haven, financial asset, investment and wealth concept.
Gold prices fell in early Asian trading on Tuesday as investors awaited the US Federal Reserve’s policy decision next week and fresh inflation data for clues about the outlook for interest rates.
Spot gold fell 0.3% to $4,126.84 per ounce by 0102 GMT, while US gold futures for December delivery dropped 0.3% to $4,146.00.
Investor attention has shifted to the Fed’s October 27–28 policy meeting and next week’s US Personal Consumption Expenditures (PCE) data, a key inflation gauge closely monitored by the central bank as it targets 2% inflation.
In September, the US central bank raised its benchmark overnight interest rate by 25 basis points to a range of 3.75%–4.00%.
According to CME’s FedWatch Tool, traders are pricing in an 83% probability that the central bank will leave interest rates largely unchanged next week, while expectations for a rate hike in December remain at 94%.
Bank of Japan Governor Kazuo Ueda said underlying inflation was “quite close” to the central bank’s 2% target, with strong global demand for artificial intelligence adding to inflationary pressures from a tight labour market. His comments signalled scope for further interest rate increases.
Higher interest rates typically weigh on gold prices because they increase the opportunity cost of holding bullion, which does not pay interest.
On the geopolitical front, Yemen’s Iran-aligned Houthi group said on Monday that it had carried out several attacks targeting Saudi energy, airport and military facilities.
Among other precious metals, spot silver fell 0.7% to $56.69 per ounce, while platinum was steady at $1,639.65. Palladium dropped 0.7% to $1,112.08.
