Gold slips as firmer dollar pressures bullion ahead of Fed decision

what happened

Gold prices eased in early Asian trade on Tuesday, Reuters reported, as a stronger US dollar made dollar-priced bullion less attractive to overseas buyers. Spot gold was down 0.1% at $4,013.70 an ounce by 00:45 GMT, while December US gold futures fell 0.3% to $4,027.10.

Investors are focused on the Federal Reserve's policy meeting this week. Policymakers have signaled they will not raise short-term borrowing costs again at this meeting, but inflation worries remain strong, and many expect the pause to be brief. CME FedWatch pricing puts the chance of a hike this week at about 11% and a December increase at 82%. The Fed decision is due Wednesday, and the Personal Consumption Expenditures index, a gauge the central bank watches closely against its 2% target, comes out Thursday.

Elsewhere, silver edged up 0.1% to $53.97 an ounce, platinum held at $1,527.81 and palladium slipped 0.7% to $1,042.43. Nornickel, the largest palladium producer globally, warned that a planned furnace overhaul could cut output of key metals in 2027 and 2028. Meanwhile, a Saudi-led coalition said it intercepted and destroyed three ballistic missiles fired by Houthis toward Saudi Arabia's Eastern Region, and officials from Saudi Arabia, Turkey and Pakistan met Iranian officials in Tehran to ease Middle East tensions.

why it matters

Gold is usually seen as an inflation hedge, but higher rates reduce the appeal of non-yielding assets, so the Fed's signals on the rate path are the main driver for bullion now. A firmer dollar adds pressure, and PCE data on Thursday could shift market expectations further.

market impact

Gold, silver, platinum: a firmer dollar and rate-hike bets weigh on precious metals

tags

instruments