Gold prices slip from record highs ahead of Fed rate decision

Investing.com -- Gold prices slipped from record highs Wednesday as investors turned cautious ahead of the U.S. Federal Reserve’s interest rate decision and policy outlook due later in the day.

At 08:35 ET (12:35 GMT), spot gold fell 0.5% at $3,670.75 an ounce, after hitting an all-time peak of $3,702.95 on Tuesday, and U.S. gold futures for December slipped 0.5% to $3,706.77/oz.

Fed likely to cut rates later in the day

“Gold prices have surged more than 40% so far this year amid Trump’s aggressive trade policy, conflicts in the Middle East and Ukraine, and central bank buying,” ING analysts noted.

Also helping the tone of late was the expectation that the Fed is set to deliver a 25 basis point cut, lowering the benchmark federal funds rate to a range of 4.00% to 4.25%. 

Such a move has now been fully priced in, with attention now turning to the updated “dot plot” of policymakers’ rate projections and Chair Jerome Powell’s comments at his press conference. Markets are watching closely for signals on the scale and pace of further cuts into 2026.

Lower interest rates typically boost gold by reducing its opportunity cost, weakening the dollar, and lifting its appeal as an inflation hedge and safe-haven asset.

The US Dollar Index hovered near 11-week lows, adding some support to bullion. 

Metal markets subdued; silver drops 1.5%

Other precious and industrial metals traded lower on Wednesday as investors squared positions ahead of the Fed decision. 

Silver Futures dropped 2% to $42.057 per ounce and Platinum Futures fell 2.4% to $1,368.60/oz.

Benchmark Copper Futures on the London Metal Exchange slipped 1.6% to $9,973.20 a ton, while U.S. Copper Futures declined 1.6% to $4.6190 a pound.

"Money managers increased their net long position in copper by 2,597 lots for a third consecutive week to 56,390 lots at the end of last week," ING added.

Ayushman Ojha contributed to this article