Gold rose on Tuesday as investors braced for a Federal Reserve interest rate cut in December and looked for signs of whether policymakers would outline a slower easing path when their two-day meeting begins later.

Spot gold prices rose 0.36% to $4,203.65 an ounce at 11:30 GMT. U.S. gold futures for February delivery rose 0.4% to $4,232.9 an ounce.

"With ongoing geopolitical turmoil increasing the precious metal's appeal as a safe-haven asset, and a dovish outlook for the Fed, which remains under political pressure to lower borrowing costs, the path of least resistance for gold prices is to remain higher," said ActivTrades analyst Ricardo Evangelista.

Gold prices could return to the $4,300 level in the near term if the Fed confirms dovish expectations, Evangelista added.

The market now rates an 89.4% chance of a 25 basis point rate cut when the policy meeting concludes on Wednesday, according to the CME FedWatch Tool, but the focus will be on signals about the future direction of policy.

Lower interest rates tend to benefit non-yielding assets like gold.

Last week, data showed the U.S. Personal Consumption Expenditures Price Index (PPI), the Fed's preferred inflation measure, matched expectations, while consumer sentiment improved in December.

Private payrolls data for November posted the sharpest decline in more than 2.5 years, but jobless claims fell to a three-year low for the week ending November 28.

Meanwhile, silver rose 0.74% to $58.56 an ounce.

The white metal hit a record high of $59.32 on Friday, with analysts citing tight physical supplies and dwindling inventories as key drivers of the rally, aided by supportive macro conditions and expectations of a Fed rate cut.

"As the year ends, silver prices could consolidate in the $55 to $60 range, depending on how monetary policy expectations evolve," said Dat Tong, senior financial market strategist at Exness.

Platinum rose 0.07% to $1,643.43 per ounce, while palladium rose 0.4% to $1,471.06 per ounce. (alg)

Source: Reuters.com