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Gold eases as traders await Fed guidance on pace of rate cuts - YAHOO FINANCE
Gold (GC=F)
Gold prices eased on Tuesday as traders, having largely priced in an imminent Federal Reserve rate cut, turned their attention to the tone of the US central bank’s two-day policy meeting beginning later in the day, searching for signals that the coming easing cycle may be gentler than markets had anticipated.
Gold futures slipped 0.1% to $4,214.70 an ounce while spot gold lost 0.5% to $4,186.93 at the time of writing.
Positioning ahead of the meeting has dominated flows, said OANDA senior market analyst Kelvin Wong. "Earlier in the month, Jerome Powell signalled hawkish rate cut guidance during his press conference. So investors in the US Treasury market are adjusting their positions."
Analysts expect the Fed to deliver what some have termed a "hawkish cut", pairing a reduction in borrowing costs with forecasts that underline a high bar for additional easing into next year.
Market pricing now assigns an 89% probability of a quarter point drop to the 3.5% to 3.75% level at this week's meeting that starts on Tuesday and ends with the announcement on Wednesday 10 December, according to CME's FedWatch Tool. Lower interest rates typically support non yielding assets such as gold.
