Here’s How Gold Is Performing Ahead Of Fed Rate Decision Tomorrow

Gold prices advanced on Tuesday morning ahead of the Fed's rate decision on Wednesday, amidst a widely anticipated 25-basis-point rate cut.

• According to data from the CME FedWatch tool, there is an 89.4% probability of a 25-basis-point rate cut in December.
• Spot silver prices rose 0.7% to $58.55 per ounce, hovering just below last week’s record high of $59.34.
• The U.S. Dollar Index (DXY) was down marginally at 99.05.

Gold prices edged higher on Tuesday morning ahead of the outcome of the Federal Open Market Committee’s (FOMC) meeting tomorrow, with markets largely expecting a 25-basis point cut in the key rate.

Spot gold (XAU/USD) prices rose 0.35% to $4,205.3 per ounce, while gold futures for February 2026 deliveries were up 0.38% at $4,233.9 an ounce.

Rate Cut Expectations

According to data from the CME FedWatch tool, there is an 89.4% probability of a 25-basis-point rate cut at the December 10 meeting. A week back, the figure stood slightly lower at 88%.

Historically, investors have flocked to safe havens such as gold and silver whenever economic or geopolitical uncertainty rises. Expectations of softer monetary policy also bolster precious metals by lowering borrowing costs and weighing on the U.S. dollar. Lower interest rates tend to favour non-yielding assets such as gold.

U.S. Macro Data

Recent U.S. economic data have offered mixed cues. The core personal consumption expenditures (PCE) inflation gauge met expectations, consumer sentiment improved, and jobless claims fell to over three-year lows, even as private payrolls recorded their sharpest drop in more than two years.

Silver Close To Record Highs

Silver, meanwhile, extended its strong run. Spot prices (XAG/USD) rose 0.7% to $58.55 per ounce, hovering just below the record high of $59.34 reached last week. 

Analysts attribute the surge in prices to tight physical supply and depleted inventories due to high demand from industrial sectors. Silver has nearly doubled in value this year, outpacing gold’s almost 60% gains.

Greenback And Copper Watch

The U.S. Dollar Index (DXY) was down marginally at 99.05. The DXY measures the greenback’s strength against a basket of six key currencies: the euro, Japanese yen, pound sterling, Canadian dollar, Swedish krona, and Swiss franc.

Meanwhile, the SPDR Gold Shares ETF (GLD) was up 0.31% at the time of writing, while the iShares Gold Trust ETF (IAU) gained 0.28%. The GLD and IAU ETFs have both surged around 58% year-to-date.

iShares Silver Trust ETF was up 0.7%, having gained 97% so far this year.

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