Gold edges higher, silver near record highs

Spot gold gained 0.2% to $4,199.20 an ounce, while Spot silver added 1.9% to $59.29/oz

Gold prices edged marginally higher Tuesday, as metal markets were cautious ahead of a U.S. central bank meeting this week.

At 13:50 GMT, Spot gold gained 0.2% to $4,199.20 an ounce and gold futures for February added 0.3% to $4,228.95/oz.

The yellow metal has registered some weakness so far in December, but was sitting on four straight months of outsized gains on cheer over lower U.S. interest rates.

The central bank is widely expected to cut interest rates by 25 basis points at the conclusion of a two-day meeting on Wednesday.

Bets on a cut were furthered by data late last week showing PCE price index– the bank’s preferred inflation gauge– cooled slightly in September.

But OCBC analysts noted that the prospect of a “hawkish hold” by the central bank were growing in recent weeks, especially given that the bank will lack crucial economic readings for October and November, going into the meeting.

Still, the prospect of lower rates has boosted gold prices in recent months, as an outlook of lower returns on U.S. debt boosted plays into non-yielding assets.

Spot platinum steadied at $1,669.25/oz, while Spot silver added 1.9% to $59.29/oz after racing to a record high of $59.3474/oz last week.

The white metal, long seen as a safe haven alternative to gold, was buoyed by a speculative frenzy centred around expectations of softer silver supplies in the coming years. The U.S.’ designation of silver as a critical mineral also contributed to the metal’s appeal.

Silver more than doubled in value this year, outpacing gold as expensive bullion prices also pushed traders into seeking alternative haven exposure in silver.