Gold falls 0.3 percent to $4,003.59 as dollar firms ahead of Fed decision
Gold fell 0.3 percent to $4,003.59 an ounce by 05:30 GMT on Tuesday, with December futures down 0.5 percent at $4,016.10, as a firmer dollar made bullion costlier for buyers holding other currencies. The dollar index sat near a two-week high around 102.11, helped by a rebound in technology stocks and a weaker euro.
The metal is still recovering from last week, when it slipped below $4,000 for the first time since mid-July and lost about 4 percent, its steepest weekly decline in roughly four months. Higher energy prices drove the sell-off by reviving inflation concerns and reinforcing bets that U.S. rates stay elevated.
Attention now turns to the Federal Reserve, whose two-day meeting ends on Wednesday with a statement at 2:00 p.m. ET and a press conference half an hour later. Policymakers lifted the target range by 25 basis points to 3.75–4 percent in September, citing elevated inflation and resilient activity. Markets price only about an 11 percent chance of a move this week, against 82 percent for a December increase.
That gap matters for gold because higher rates raise the opportunity cost of holding an asset that pays no yield. The Fed's preferred inflation gauge, the PCE price index, is due on Thursday and stood at 3.4 percent year on year in August, still well above the 2 percent target.
Safe-haven demand offered only partial cover. The Saudi-led coalition in Yemen said it intercepted missiles and drones fired toward Saudi Arabia by the Iran-aligned Houthis on Tuesday, but the dollar and rate expectations outweighed geopolitical risk. Other metals fell harder: spot silver dropped 2.51 percent to $52.91 an ounce, platinum 2.71 percent to $1,503.50 and palladium 2.5 percent to $1,026.25. In the UAE, 24-carat gold fell AED2 to AED483.25 a gram, with 22-carat at AED447.50, 21-carat at AED429.25 and 18-carat at AED367.75.
