Gold prices fell slightly on Wednesday (December 10th) as investors awaited expectations of a US Federal Reserve interest rate cut and hints about future policy, while silver extended its rally to a new high.

Spot gold prices fell 0.4% to $4,193.60 per ounce at 11:13 GMT. US gold futures for February delivery fell 0.3% to $4,221.60 per ounce.

Spot silver prices rose 0.7% to $61.11/ounce after hitting an all-time high of $61.61 earlier in the session, driven by rising industrial demand, declining inventories, and its designation as an essential mineral by the United States. The white metal has gained 112% so far this year.

"Silver prices have broken through the $60 per ounce mark, attracting more short-term speculators and trend followers to the market. This also reflects the narrative of tight physical supply in the silver market," said Julius Baer analyst Carsten Menke.

The two-day Federal Open Market Committee (FOMC) policy meeting concludes later, with an expected rate cut announcement at 19:00 GMT and Chairman Jerome Powell due to speak at 19:30 GMT. The market is assigning an 88% probability of a 25 basis point cut.

"Gold is likely to trade in a range until we receive news from the FOMC... what will move gold is not the rate cut itself, but rather the guidance for the future," said Nitesh Shah, commodity strategist at WisdomTree, adding that higher government bond yields are currently weighing on gold prices.

The yield on the benchmark 10-year US Treasury bond has risen to its highest level in more than three months.

"Over the past few weeks, investor demand for gold, measured by holdings of physically backed products, has not been as strong as demand for silver. We see this as a major factor holding back gold prices," Menke added.

"Gold performance remains one of the key drivers of silver prices – any correction in gold could lead to greater volatility in silver," said ActivTrades analyst Carolane de Palmas.

Meanwhile, White House economic adviser Kevin Hassett, the leading candidate to replace Powell as Fed chair, said on Tuesday that there is "plenty of room" to cut interest rates further, although rising inflation could change that calculation.

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

RBC Capital Markets raised its long-term gold price forecast to an average of $4,600 per ounce in 2026 and $5,100 per ounce in 2027, citing geopolitical risks, looser monetary policy, and persistent budget deficits.

Elsewhere, platinum fell 1.7% to $1,662.33, while palladium fell 0.7% to $1,495.88.(alg)

Source: Reuters.com