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Investing.com-- Gold prices edged lower Tuesday as a rebound in U.S. Treasury yields weighed on the metal, with investors turning cautious ahead of a series of key economic indicators and the Federal Reserve’s highly anticipated policy decision.
At 09:10 ET (14:10 GMT), Spot gold slipped 0.4% to $4,215.70 per ounce, after touching a six-week high in the previous session, an U.S. Gold Futures traded 0.7% lower at $4,247.40 an ounce.
Gold slips as treasury yields rise
The pullback came as benchmark 10-year Treasury yields hovered near a two-week high, eroding demand for non-yielding bullion and tempering optimism around growing expectations of a near-term Fed rate cut.
Despite the softer tone, the underlying sentiment toward gold remained broadly constructive. Market pricing continues to reflect firm expectations that the Fed could deliver another interest-rate cut next week, with investors betting that softening inflation and signs of cooling labour conditions will give policymakers room to ease.
A rate cut would typically support bullion by lowering the opportunity cost of holding safe-haven metals.
However, traders remained wary of taking large positions ahead of several important data releases.
The November ADP private-sector employment and delayed September Personal Consumption Expenditures (PCE) Price Index -- the central bank’s preferred inflation gauge -- are scheduled for release this week and could significantly shift expectations on the timing and scale of policy easing.
Gold markets also continued to digest political uncertainty around Federal Reserve leadership. U.S. President Donald Trump said on Sunday that he had decided on a nominee to replace Fed Chair Jerome Powell but did not disclose the name.
The comment left investors speculating on potential candidates, with some reports suggesting White House economic adviser Kevin Hassett is among the frontrunners.
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Gold to stay supported through 2026 - UBS
UBS analysts expect gold to stay supported through 2026 as a mix of resilient official-sector demand, persistent macro uncertainty and ongoing de-dollarisation continues to underpin the yellow metal.
The bank says gold entered 2025 as a “consensus long” and remains so heading into next year. While the bullion at times looked like a crowded momentum trade, analysts note that traditional measures such as Comex positioning and ETF flows do not show signs of extreme bullishness.
Instead, the rally has been “supported by broad-based buying reflecting a structural shift in private and official sector demand,” a team led by Daniel Major wrote.
Metal markets subdued; silver slips from record high
Other precious and industrial metals traded lower on Tuesday as investors squared positions ahead of the Fed decision.
Silver futures fell 1.4% to $58.345 per ounce after hitting record highs of $59.44 on Monday. Platinum Futures lost 2.2% to $1,648.25/oz.
Benchmark Copper Futures on the London Metal Exchange slipped 0.4% to $11,219.15 a ton, while U.S. Copper Futures dropped 0.3% to $5.2875 a pound.
Ayushman Ojha contributed to this article
Ayushman Ojha contributed to this article