Precious Metals Slip as Markets Brace for Federal Reserve Decision

Spot gold traded near $3,994.60 an ounce, shedding 0.54%, while silver faced a steeper 2.03% decline to $52.75. The downward pressure stems from a consensus that the Fed will maintain its benchmark rate between 3.75% and 4.00% this week, while keeping the door open for further tightening before year-end. Interest rate futures currently price in a 73% probability of another hike by December, a prospect bolstered by September’s 3.7% annual inflation rate.

Energy markets continue to complicate the economic picture. Despite diplomatic efforts in Tehran aimed at de-escalating regional tensions, the Strait of Hormuz remains a flashpoint. Brent crude hovered near $116.24 a barrel, with Houthi activity near regional energy infrastructure offsetting gains from recent peace talks. This geopolitical premium keeps inflation expectations elevated, often acting as a headwind for non-yielding bullion despite its traditional status as a safe haven.