Gold prices remained close to record highs on Tuesday as investors anticipated the U.S. Federal Reserve’s upcoming decision on interest rates, which could include a significant rate cut. Spot gold was stable at $2,581.68 per ounce, following Monday’s peak of $2,589.59. U.S. gold futures also held steady at $2,608.60.
IG market strategist Yeap Jun Rong noted that gold’s rally paused amid investor caution as the market awaited further guidance from the Fed. The Federal Reserve’s two-day policy meeting, set to conclude on Wednesday, has led markets to price in a 66% chance of a 50-basis-point rate cut, up from 43% last Friday.
While gold benefits from lower interest rates, a rate cut this week may trigger a short-term price correction, according to Nicholas Frappell, global head of institutional markets at ABC Refinery. The dollar weakened slightly, making gold more affordable for foreign investors.
Goldman Sachs remained bullish on gold, citing increased holdings in gold-backed ETFs as Fed rates decline. Spot silver rose 0.1% to $30.79 per ounce, platinum climbed 0.6% to $986.90, and palladium gained nearly 1% to $1,087.09, reaching its highest level since April. Meanwhile, Chinese markets were closed for the Mid-Autumn Festival.
