Gold edged down on Tuesday as investors, having mostly priced in a Federal Reserve rate cut, looked ahead for clues that the US central bank might opt for a gentler-than-expected easing cycle when its two-day policy meeting begins later in the day.
Spot gold was down 0.3% to $4,174.91 per ounce, as of 0609 GMT. US gold futures for December delivery slipped 0.4% to $4,202.70 per ounce.
Investors are largely repositioning ahead of the Federal Reserve's policy meeting, OANDA senior market analyst Kelvin Wong said.
"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."
The benchmark US 10-year Treasury yields held near a 2-1/2-month peak hit on Monday, Reuters reported.
Analysts widely expect a "hawkish cut" this week accompanied by guidance and forecasts that signal a high threshold for further easing into next year.
Last week, data showed the US Personal Consumption Expenditures (PCE) Price Index, the Fed's preferred inflation gauge, landed in line with expectations, while consumer sentiment improved in December.
Private payrolls for November recorded their sharpest drop in more than 2-1/2 years, but jobless claims fell to a three-year low for the week ended November 28.
Markets now assign an 89% probability of a quarter-point cut at the Fed's December 9–10 meeting, according to CME's FedWatch Tool.
Lower interest rates tend to favor non-yielding assets such as gold.
Meanwhile, silver fell 0.6% to $57.76 per ounce. The white metal hit a record high of $59.32 on Friday.
"Right now, silver is more of a higher-beta play among precious metals," Wong said, adding that low inventories, strong industrial demand, and expectations of Fed rate cuts are driving its momentum, pushing it into risk-on mode and outperforming gold.
Platinum lost 0.2% to $1,638.35, while palladium shed 0.4% to $1,459.78.
