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Investors are watching for Fed rate cuts and profit-booking as gold prices fall.

The gold price fell on Tuesday, as investors took profit after a six-week peak in the previous session. However, expectations of Federal Reserve rate reductions provided some support before this week's key U.S. Economic Data.

By 9:58 am, spot gold had fallen 0.3% per ounce to $4219.96. After falling more than 1% in the previous session, spot gold fell 0.3% to $4,219.96 per ounce by 09:58 a.m. ET (1458 GMT).

U.S. Gold Futures for February Delivery were down 0.5%, at $4.253.10 an ounce.

Peter Grant, senior metals analyst at Zaner Metals and vice president of the company, said: "It is probably just some profit-taking... The market has focused on rate cuts expectations in recent months and they remain fairly steady."

"We are in an upward breakout pattern and I like gold at $5,000 early in the New Year."

The recent data showing a slowing of the U.S. economic growth, combined with the dovish comments of Federal Reserve policymakers has led to increased market expectations of a 25 basis-point cut in the Fed's rate at its meeting next week. Traders have priced an 87% chance of this happening.

Investors will also be watching the November ADP Employment report, which is due on Wednesday, and the September Personal Consumption Expenditures Index (PCE), which is the preferred inflation indicator of the Fed, that's due Friday. Gold that does not yield is usually a good investment.

According to the World Gold Council, central banks purchased 53 tons of gold during October, a 36% increase month-on-month. This is the highest monthly net demand seen since 2025.

Silver fell from its record high of 58.83 dollars per ounce, which was reached on Monday. It eased 0.4% to 57.42 dollars an ounce. The price has increased by over 100% in the past year.

"There are no new factors for the recent increase in silver prices." The known reasons for the recent price jump (in silver) still hold true, including tight supply which is reflected by low inventories at the Shanghai exchanges," Commerzbank stated in a report. They also expect another, moderate, increase in price to $59 over the next year.

Palladium rose 0.7% to $1.434.29. Platinum fell 2% to 1,624.20. (Reporting from Anmol Choubey, Bengaluru; additional reporting by Polina Devitt. Editing by Shailesh Kumar)

(source: Reuters)