Gold prices hovered near a record high on Tuesday as markets braced for the anticipated start of the U.S. interest rate reduction cycle, which could feature a significant rate cut from the Federal Reserve.
Spot gold remained eased 0.1% to $2,581.68 per ounce as of 2:30 pm AEST (4:30 am GMT), following Monday’s record peak of $2,589.7.
Investors are closely monitoring the U.S. Federal Reserve's two-day policy meeting, which concludes on Wednesday. Current market sentiment points to a 66% probability of a 50-basis-point rate cut, up from 43% last Friday.
Gold, which offers no yield, tends to become a more attractive investment in a lower interest rate environment, as reduced borrowing costs often bolster demand for the precious metal.
Meanwhile, the U.S. dollar dipped by 0.1%, making gold more affordable for investors holding other currencies.
Also on the radar is August's U.S. retail sales data, due at 10:30 pm AEST (12:30 pm GMT), which could further influence market sentiment.
Elsewhere, spot silver edged up 0.1% to $30.79 per ounce, and platinum gained 0.6% to reach $986.90. Palladium climbed nearly 1% to $1,087.09, its highest level since April 11.
Chinese markets were closed on Tuesday due to the mid-autumn festival.
