Mubasher: Gold prices edged down on Tuesday as the majority of investors stayed on the sidelines, anticipating the outcome of the US Federal Reserve meeting later this week, amid widely expected rate cuts, according to Reuters.

By 7:32 am GMT, spot gold inched down by 0.08% at $1,497.25 per ounce after rising as much as 1% in the preceding session due to escalating geopolitical tensions in the Middle East, while US gold futures fell by 0.53% at $1,503.40 per ounce.

A quarter-point rate cut by the Fed is widely expected to be announced on Wednesday after the two-day policy meeting.

This would mark the second rate cut since 2008, after delivering the first one last July.

Moreover, the Fed’s tone and new economic forecasts will be closely watched amid the ongoing trade war between the US and China, stimulus measures by the European Central Bank (ECB) and a string of soft manufacturing economic reports.

The attacks on Saudi Arabia’s oil processing facility at Abqaiq and the nearby Khurais oilfield prompted US President Donald Trump to nag once again the Fed about lowering interest rates.

While the market is looking for a new catalyst, “if the Fed goes against market expectations, there is a strong possibility that we may see a short-term reversal [for gold] and a quick sharp test towards $1,455,” Phillip Futures analyst Benjamin Lu was quoted by Reuters.

In addition, currencies of oil-exporting nations firmed up, as the US dollar was lent support after the attacks on the Saudi installations and the threat of military response in the region boosted crude oil prices, and pressured stock markets.