WASHINGTON (dpa-AFX) - Gold prices tumbled on Tuesday as investors opted for profit taking from Monday's gains while they refrained from big bets ahead of next week's FOMC meeting.
Front Month Comex Gold for December delivery declined sharply by $52.70 (or 1.24%) to $4,186.60 per troy ounce.
Front Month Comex Silver for December delivery moved lower by 43.50 cents (or 0.74%) to $57.983 per troy ounce.
Over the past few days, the yellow metal gained on increasing expectations of a rate cut by the U.S. Federal Reserve based on supporting economic releases that came one after another since the shutdown ended.
The rate cut bets intensified amid dovish comments by several Fed officials, which weighed on the U.S. dollar and aided the precious metals.
Yesterday, the U.S. S&P Global manufacturing purchasing managers' index read 52.2 for November, up slightly from a preliminary estimate of 51.9 but down from October's reading of 52.5.
The Institute for Supply Management's manufacturing PMI declined to 48.2 in November (the lowest in four months) compared to 48.7 in October, revealing that the manufacturing sector has contracted for the ninth consecutive month, bolstering expectations for further monetary easing.
The November ADP employment report is due on Wednesday.
The September month's Personal Consumption Expenditures (PCE) Index - the U.S. Federal Reserve's preferred inflation gauge - is due to be released on Friday which, according to analysts, may show that inflationary pressures are stable but sticky.
On the geopolitical front, the Trump administration is pushing the pedal harder to end the ongoing Russia-Ukraine conflict soon.
High-level officials from the U.S. had discussions with their Ukrainian counterparts in Florida. Reportedly, the meeting had gone well with some issues needing further refinement.
Today, U.S. special envoy for Russia Steve Witkoff is meeting Russian President Vladimir Putin in Moscow to take things to the next level.
Though U.S. President Donald Trump has not revealed his pick for the post of U.S. Federal Reserve Chair next year, speculation is rife that Kevin Hassett is the frontrunner. Hassett is a known supporter of a low-rate policy regime.
Hence, optimism prevails in the market that the Fed will announce an interest rate cut at the conclusion of the Federal Open Market Committee's final meeting of the year.
The officials now move into a a 'blackout period' when they are forbidden to reveal anything.
This has left traders to rely on the private and official data releases to interpret how the economy is performing.
Around two weeks before, money markets were expecting only around a 35% chance of a rate cut.
Currently, the CME Group's FedWatch Tool is indicating that investors are betting on an 87.4% chance of a quarter-point interest rate cut at the Fed's meeting on December 9-10.
The U.S. dollar index was last seen trading at 99.42, up by 0.02 (or 0.02%) today.
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