Gold prices fell on Tuesday (December 16th), as investors became more cautious ahead of crucial US jobs and inflation data, which could provide clues to Federal Reserve policy heading into the new year.

Spot gold prices fell 0.3% to $4,290.33 an ounce, as of 06:37 GMT. Bullion has gained 64% since the start of the year, breaking several records along the way. US gold futures fell 0.4% to $4,316.40.

"We're right near the previous high around $4,380 from mid-October. So the market is essentially asking whether there's enough conviction to break higher, or whether this is the level where momentum starts to fade," said Ilya Spivak, head of global macro at Tastylive.

Traders are pricing in a 76% probability that the Fed will hold rates steady in January, according to the CME's FedWatch tool. This week's economic data is expected to provide fresh clues about how quickly the Fed may ease policy in 2026.

The combined US employment report for October and November, due on Tuesday, will lack some details after the 43-day government shutdown hampered data collection, including the October unemployment rate.

Fed Governor Stephen Miran said the current above-target inflation does not reflect the underlying supply and demand dynamics that are producing price increases much closer to the central bank's 2% target.

The market is also awaiting weekly jobless claims and the Fed's preferred inflation indicator, the Personal Consumption Expenditures Index, due later this week.

Non-yielding gold bullion typically thrives in a low-interest rate environment.

Elsewhere, spot silver fell 1.4% to $63.03 an ounce, after hitting a record high of $64.65 on Friday.

KCM Trade Chief Market Analyst Tim Waterer said silver maintained its bullish trend as industrial demand showed no signs of slowing, following a 121% rally this year driven by strong industrial and investment demand and tightening inventories.

Spot platinum rose 1.3% to $1,806.46, while palladium rose 1% to $1,582.68. (alg)

Source: Reuters.com