Gold Holds Steady as Traders Brace for Fed; Silver Trades Near All-Time Highs

Gold prices were little changed in Asia on Tuesday as investors stayed on the sidelines ahead of this week’s Federal Reserve meeting, where policymakers are widely expected to deliver another interest rate cut.

Although the metal has softened slightly in early December, gold remains supported by four consecutive months of strong gains, fueled by optimism over easing U.S. monetary policy. Other precious metals also saw muted moves, while silver continued to hover just shy of record levels after a sharp rally last week.

Spot gold slipped 0.1% to $4,186.18 per ounce, and February gold futures inched down to $4,215.40/oz at 00:04 ET (05:04 GMT).

Market eyes Fed cut, but tone still unclear

Most analysts expect the Federal Reserve to trim interest rates by 25 basis points when it concludes its two-day meeting on Wednesday.

Expectations strengthened after last week’s data showed a modest decline in the PCE price index, the Fed’s preferred inflation gauge.

However, OCBC analysts noted growing chatter around the possibility of a “hawkish hold” in recent weeks, particularly because the Fed will be making its decision without the usual flow of updated economic data for October and November.

Even so, anticipation of lower borrowing costs has boosted gold in recent months, as reduced yields on U.S. debt generally increase demand for non-yielding assets.

Other precious metals were steady on Tuesday but have enjoyed solid upward momentum lately. Spot platinum traded at $1,651.81/oz, while silver continued to outperform.

Silver steadies near landmark highs

Spot silver hovered around $58.1/oz, holding close to last week’s record of $59.3474/oz.

The metal — frequently viewed as a defensive alternative to gold — has surged amid heavy speculative buying driven by expectations of tightening supply. Its appeal also strengthened after the U.S. officially classified silver as a critical mineral.

Silver prices have more than doubled this year, far outpacing gold, as the high cost of bullion has encouraged investors to diversify their safe-haven exposure.