Gold slips as investors weigh Fed rate outlook

Gold prices edged lower in Asian trading on Tuesday as markets looked ahead to the US Federal Reserve’s October 27-28 meeting and upcoming inflation data. Business Recorder reported spot bullion down 0.3% at $4,126.84 an ounce by 0102 GMT, while December US futures also lost 0.3%, reaching $4,146.00.

The US Personal Consumption Expenditures measure is among the indicators investors are watching ahead of the Fed’s decision, with the central bank targeting 2% inflation. The Fed raised its benchmark rate by 25 basis points in September, taking it to 3.75%-4.00%; CME’s FedWatch Tool puts the likelihood of no material change next week at 83%, while December rate-hike expectations stand at 94%.

Higher rates can make non-interest-bearing bullion less attractive, while geopolitical developments also remain in focus after Yemen’s Houthis reported attacks on Saudi energy, airport and military sites. Elsewhere in precious metals, silver fell 0.7% to $56.69 an ounce, platinum was steady at $1,639.65, and palladium declined 0.7% to $1,112.08.