Gold prices just higher ahead of Fed decision; silver near record highs
Gold prices edged marginally higher Tuesday, as metal markets hunkered down before a U.S. Federal Reserve meeting this week, which could dictate risk sentiment for the rest of the year.
At 08:50 ET (13:50 GMT), Spot gold rose 0.2% to $4,199.20 an ounce and gold futures for February gained 0.3% to $4,228.95/oz.
The yellow metal has registered some weakness so far in December, but was sitting on four straight months of outsized gains on cheer over lower U.S. interest rates.
Fed rate cut largely priced in, outlook uncertain
The Fed is widely expected to cut interest rates by 25 basis points at the conclusion of a two-day meeting on Wednesday.
Bets on a cut were furthered by data late last week showing PCE price index– the Fed’s preferred inflation gauge– cooled slightly in September.
But OCBC analysts noted that the prospect of a “hawkish hold” by the Fed were growing in recent weeks, especially given that the central bank will lack crucial economic readings for October and November, going into the meeting.
Still, the prospect of lower rates has boosted gold prices in recent months, as an outlook of lower returns on U.S. debt boosted plays into non-yielding assets.
Silver perched near record highs
Spot platinum steadied at $1,669.25/oz, while Spot silver gained 1.9% to $59.29/oz after racing to a record high of $59.3474/oz last week.
The white metal, long seen as a safe haven alternative to gold, was buoyed by a speculative frenzy centered around expectations of softer silver supplies in the coming years. The U.S.’ designation of silver as a critical mineral also increased the metal’s appeal.
Silver more than doubled in value this year, outpacing gold as expensive bullion prices also pushed traders into seeking alternative haven exposure in silver.
Source: Reuters.com
