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Gold price (XAU/USD) trades in negative territory near $4,210 during the early Asian session on Wednesday. The precious metal edges lower as traders expect the Federal Open Market Committee (FOMC) to take a hawkish approach to future easing of monetary policy at its upcoming policy meeting on Wednesday. 

The Federal Reserve (Fed) is likely to deliver its third straight interest rate cut on Wednesday, which will bring the federal funds rate down to a target range of 3.50% to 3.75%. Fed funds futures traders are now pricing in nearly a 90% chance of a rate reduction in the December meeting, up from 71% probability earlier this month, according to the CME FedWatch Tool.

Nonetheless, analysts believe Fed Chair Jerome Powell's press conference will likely suggest a higher bar for future rate cuts, possibly hinting at a pause after this move. The ‘hawkish cut’ from the US central bank could weigh on the non-yielding yellow metal in the near term. 

“The likeliest outcome is a kind of hawkish cut where they cut, but the statement and the press conference suggesting that they may be done cutting for now,” said Bill English, the Fed’s former director of monetary affairs and now a Yale professor.

On the other hand, major central banks' demand for Gold might support its upside. Official data on Sunday showed that the People’s Bank of China (PBoC) added to its gold reserves for a 13th straight month. Bullion held by the Chinese central bank rose by 30,000 troy ounces last month, bringing the total to around 74.12 million troy ounces.

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