Spot gold fell 0.3% in early Asian trading on Tuesday as the market awaited signals on interest rates from next week's Federal Reserve meeting. As of 01:02 GMT, spot gold was quoted at $4,126.84/oz, while December U.S. gold futures fell 0.3% to $4,146.00/oz.
Rate Expectations The Fed meets on Oct 27-28, and U.S. PCE data — a key indicator for its 2% inflation target — will also be released next week. In September the Fed raised rates by 25 basis points to 3.75%-4.00%. CME FedWatch shows an 83% probability of holding steady next week and a 94% expectation of a rate hike in December.
Central Bank Stance Bank of Japan Governor Kazuo Ueda said underlying inflation is "quite close" to the 2% target, with AI demand and a tight labor market adding to inflation pressure, suggesting there is still room to raise rates. Higher rates typically weigh on gold prices, as the opportunity cost of holding non-yielding gold rises.
Geopolitics and Precious Metals Yemen's Houthi forces said on Monday they attacked Saudi energy, airport and military targets. Spot silver fell 0.7% to $56.69/oz, platinum held steady at $1,639.65, and palladium fell 0.7% to $1,112.08.