Ammon News - Gold ​prices slipped on Tuesday, weighed down by a firmer dollar, while investors looked ‌ahead to the Federal Reserve's policy meeting for fresh guidance on the outlook for interest rates.

Spot gold eased 0.3% to $4,003.59 per ounce by 0530 GMT, while US gold futures for December delivery ​dropped 0.5% to $4,016.10.

The US dollar held steady near a two-week high, reducing the appeal ​of greenback-priced bullion for overseas buyers.

"We're seeing gold basically digest within ⁠Friday's range (after) the big drop last week," said Ilya Spivak, head of global macro ​at Tastylive.
"If we can get a break through $3,900, we're in for a pretty significant further ​decline, maybe to test the $3,800 area."

Bullion dropped below the $4,000 mark for the first time since mid-July last week, and posted a weekly fall of 4%, its worst in about four months, as higher energy prices ​fueled inflation concerns and reinforced US rate hike expectations.

Federal Reserve policymakers have telegraphed they ​will not raise US short-term borrowing costs again this week, but with inflation concerns still front ‌and center, ⁠investors doubt a pause will last for long.

Markets await the Fed's policy decision on Wednesday along with the Personal Consumption Expenditures data on Thursday, the central bank's preferred gauge as it targets a 2% inflation rate.

Traders are pricing in about an 11% chance ​of a rate hike ​this week and ⁠an 82% chance of a December increase, according to the CME's FedWatch Tool.

While gold is often seen as a hedge against ​inflation, higher interest rates hurt its appeal as a non-yielding asset.

On ​the geopolitical ⁠front, the Saudi-led coalition in Yemen said on Tuesday it intercepted and destroyed three ballistic missiles and drones launched by the Houthis towards two regions of Saudi Arabia, as the conflict ⁠between ​the kingdom and the Iran-aligned group intensifies.

Among other metals, ​spot silver slid 1.6% to $53.06 per ounce, platinum lost 1.3% to $1,506.94 and palladium dropped 1.8% to $1,030.75.


Reuters