Gold prices edged higher on Tuesday, supported by a weaker U.S. dollar, as investors awaited the Federal Reserve's policy meeting next week for signals on interest rate adjustments. Spot gold rose 0.1% to $4,145.22 per ounce, while U.S. gold futures for December delivery climbed 0.1% to $4,164.70.
Kyle Rodda, senior financial market analyst at Capital.com, noted that gold could benefit if the Fed keeps interest rates unchanged, as the initial reaction might be supportive. Recent remarks from Fed officials have reduced expectations of a rate hike at the October 27-28 meeting, with traders pricing in an 82% chance of no change, according to CME's FedWatch Tool. However, expectations for a December hike remain high at 89%.
The U.S. dollar index softened, making gold more affordable for international buyers. Rodda also suggested that easing Middle East tensions and lower oil prices could further boost gold prices. Meanwhile, oil prices advanced, with Brent crude hovering near a five-month high due to geopolitical risks.
Among other precious metals, spot silver increased 0.7% to $57.48 per ounce, platinum gained 0.7% to $1,651.25, and palladium fell 0.2% to $1,117.87. Bank of Japan Governor Kazuo Ueda indicated that underlying inflation is nearing the central bank's 2% target, hinting at potential further rate increases.