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Gold Price (XAU/USD) trades in negative territory around $4,195 during the early Asian session on Tuesday. The precious metal edges lower amid concerns that the US Federal Reserve (Fed) will adopt a hawkish tone in its rhetoric, despite delivering a rate cut on Wednesday. 

Markets widely expect a 25 basis points (bps) rate cut at the Fed’s December meeting, with traders seeing a 90% probability, up from about 66% in November, according to the CME FedWatch tool. Traders will closely monitor the press conference and a Summary of Economic Projections, or ‘dot-plot,’ for fresh impetus. If the US central bank delivers a "hawkish cut," this could support the US Dollar (USD) and weigh on the USD-denominated commodity price.

The market is waiting for the Fed decision and for more guidance on policy," said Peter Grant, vice president and senior metals strategist at Zaner Metals.

The US employment reports will be published on Tuesday ahead of the Fed interest rate decision. The ADP Employment Change four-week average and JOLTS Job Openings for September and October will be the highlights. In case of weaker-than-expected outcomes, this could boost the expectations of a US rate reduction, underpining the yellow metal. Lower interest rates could reduce the opportunity cost of holding Gold, supporting the non-yielding precious metal.

Meanwhile, uncertainty and escalating tensions could boost traditional safe-haven assets like the Gold price. Tensions are mounting once again between US President Donald Trump and Ukrainian President Volodymyr Zelenskyy after Trump accused Ukraine’s head of state of not even reading the US’s peace proposals yet, per CNBC. 

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