Gold slips as investors weigh Fed rate outlook

Gold slipped in early Asian trade on Tuesday as investors awaited the US Federal Reserve policy decision next week for signals ​on interest rates and the broader outlook for monetary ‌policy.

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 focus has shifted to ​the Fed’s October 27-28 policy meeting and next week’s US ​Personal Consumption Expenditures (PCE) data, a key gauge closely watched ⁠by the central bank as it targets 2% inflation.

The US ​central bank in September raised its benchmark overnight interest rates by 25 ​basis points to the 3.75%-4.00% range.

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According to CME’s FedWatch Tool, traders are pricing in an 83% chance that the central bank will leave rates largely ​unchanged next week, while expectations for a hike in December remain ​at 94%.

Bank of Japan Governor Kazuo Ueda said underlying inflation is “quite close” to ‌the ⁠central bank’s 2% target with strong global AI demand adding to inflationary pressure from a tight job market, signalling scope for further 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 Houthis said on Monday they carried ​out several attacks against Saudi energy, airport and military ​targets.

Among other metals, spot silver slid 0.7% to $56.69 per ounce, platinum steadied at $1,639.65 and palladium dropped 0.7% to $1,112.08.