WASHINGTON (dpa-AFX) - Gold prices edged lower on Wednesday as traders resorted to light profit-taking ahead of today's much-anticipated U.S. Federal Reserve interest rate announcement followed by Fed Chair Jerome Powell's remarks.
Front Month Comex Gold for December delivery moved lower by $10.30 (or 0.24%) to $4,196.40 per troy ounce.
Front Month Comex Silver for December delivery advanced by 21.00 cents (or 0.35%) to $60.379 per troy ounce.
Notably, silver prices extended yesterday's 4.14% spike to reach a new record high.
Following the two-day meeting of the Federal Open Market Committee that began yesterday, the U.S. Federal Reserve is set to announce its decision on interest rates later today.
Recent data on jobs from official sources that were released after the end of the longest government shutdown in the U.S. along with private data, though contrasting somewhat, concurred to indicate a softening in the jobs market.
Friday's belated government report revealed that consumer prices (as measured by the Personal Consumption Expenditures index) rose 2.8% over the 12 months through September, up from a 2.7% annual increase in August, in line with expectations.
Inflation is still higher than the Fed's target, but the deceleration seen in core inflation has eased concerns among traders about tariff-fueled inflation.
Analysts are factoring in that Powell, and his team may adopt, what is called, a 'hawkish cut,' a term used for a rate cut that comes along cautionary lines that restrict market expectations for future reductions.
Markets have priced in that the Fed would cut its benchmark rate by 25 basis points to a 3.5% to 3.75% range amid signs that the job market is softening.
U.S. Fed Chair Jerome Powell is scheduled to address reporters at 2:30 p.m. ET, when he will reason out his team's decision and answer questions on the policy path ahead.
This, along with the Fed governors' individual projections for 2026 is widely anticipated by traders to understand Fed's stand on future rate cuts, and if so, how many times.
The U.S. dollar index which is seeing a fresh downturn since late October was last seen trading at 98.93, down by 0.29 (or 0.29%) today.
On the geopolitical front, attempts by U.S. President Donald Trump's administration to secure a swift compromise to end the ongoing Russia-Ukraine war have yet to make headway.
The plan welcomed by Russia has been opposed by Ukraine and Ukraine-friendly nations in Europe. European leaders have criticized it as pro-Russia and compelling Ukraine to cede some of its territories back to Russia.
Ukrainian President Volodymyr Zelenskyy is set to submit a new proposal to the U.S. negotiators by today with terms acceptable to Ukraine.
In Asia, with tensions between China and Japan escalating, Russia and China conducted a 'long-distance joint flight' from the Sea of Japan toward the East China Sea. In response, Japanese and South Korean jets monitored the Russian and Chinese air forces.
The U.S. has criticized China for attempting to disturb regional peace and security.
In South America, the conflict between the U.S. and Venezuela is escalating. Trump has accused the Venezuelan regime of promoting narco and illegal human trafficking to the U.S.
In an interview with Politico, Trump had cautioned that the days of Venezuelan President Nicolas Maduro were 'numbered.' Two Super Hornets flew over Venezuela before circling the gulf for about 40 minutes.
The 'wait-and-watch' mindset among traders, geopolitical uncertainties, and the anticipated Fed's analysis of U.S. economy have been acting as a tailwind for the precious metal.
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