Gold prices edged lower in early trading as investors await the Federal Reserve’s upcoming policy meeting, with markets pricing in a likely hold on interest rates. The XAU/USD pair declined 0.3% to $2,278.40 per ounce, while the GLD ETF dropped 0.4% to $56.12.
- XAU/USD declined to $2,278.40 per ounce, a 0.3% drop.
- GLD ETF fell 0.4% to $56.12 amid cautious investor positioning.
- US10Y yield rose to 4.82%, reflecting higher real yields.
- Markets assign a 72% probability to a Fed rate hold.
- Upcoming Fed meeting (Dec 17–18) is a major catalyst for gold volatility.
- Gold remains sensitive to shifts in real interest rates and dollar strength.
Gold prices slipped modestly on Monday, retreating to $2,278.40 per ounce in early trading as global market participants turned their focus to the Federal Reserve’s upcoming policy announcement. The XAU/USD spot rate dipped 0.3% amid growing anticipation of a pause in rate hikes, with traders assessing the central bank’s stance on inflation and labor market resilience. The U.S. 10-year Treasury yield (US10Y) rose to 4.82%, reflecting increased expectations of sustained high rates even if no change is made at the meeting. The GLD ETF, a widely tracked gold-backed exchange-traded fund, fell 0.4% to $56.12, signaling cautious sentiment among institutional investors. Despite gold’s status as a traditional safe-haven asset, rising yields and a strong U.S. dollar have pressured the metal, particularly ahead of pivotal macroeconomic data due this week. Analysts note that any hint of a dovish shift in Fed communication could spark a rebound in gold, while a hawkish tone may extend the downward pressure. With the Fed meeting scheduled for December 17–18, markets are closely monitoring expectations for the dot-plot projections and Chair Jerome Powell’s post-meeting press conference. A shift in messaging could trigger volatility across fixed income, equities, and commodity markets, especially given the sensitivity of gold to real interest rate differentials. Current pricing suggests a 72% probability of a rate hold, with only an 18% chance of a rate hike.