Pullback Follows Six-Week High, but Fed Outlook Still Supports Bullion
Gold prices eased on Tuesday as investors locked in gains after the metal hit a six-week peak in the previous session. Spot gold fell 1.5% to $4,168.23 per ounce, while U.S. gold futures for February delivery dropped 1.7% to $4,203.
Analysts said the move reflects routine profit taking rather than a shift in sentiment. “It’s probably just a little bit of profit taking… the market’s biggest focus of late has been rate cut expectations and those remain pretty steady,” said Peter Grant, vice president and senior metals strategist at Zaner Metals. He added that bullion remains in a consolidation phase that “will eventually lead to an upside breakout,” reaffirming his target of $5,000 early next year.
Markets Eye Fed Decision as Rate Cut Bets Hold Firm
Expectations of a 25-basis-point rate cut at next week’s Federal Reserve meeting continue to underpin gold, with traders pricing in an 87% probability of a move. Recent data has pointed to a gradual cooling of the U.S. economy, reinforcing dovish signals from Fed officials and boosting demand for non-yielding assets like gold.
Attention now turns to key U.S. indicators: Wednesday’s ADP employment report and Friday’s delayed September PCE Index, the Fed’s preferred inflation gauge. Softer readings would strengthen the case for further policy easing.
Central Bank Demand Remains Robust
The World Gold Council reported that global central banks purchased 53 tons of gold in October, a 36% month on month increase and the strongest monthly net buying since early 2025. Persistent official sector demand has been a key pillar of support for the metal throughout the year.
Silver Retreats from Record; Mixed Moves in Platinum and Palladium
Silver prices pulled back 1.1% to $57.30 per ounce after hitting a record $58.83 on Monday. Even with the dip, silver remains up more than 100% year to date. Analysts at Commerzbank noted that while no new catalysts emerged for the recent surge, tight supply — reflected in low Shanghai inventories — continues to justify elevated prices. They see silver edging to $59 next year.
In other precious metals, platinum fell 2.5% to $1,616.75, while palladium rose 1.6% to $1,446.61.
