BASICS
* Spot gold rose 0.1% to $2,572.11 an ounce by 0018 GMT. Bullion hit a record high of $2,589.59 on Monday.
* US Gold Futures rose 0.2% to $2,598.30.
* Data released on Tuesday showed U.S. retail sales unexpectedly rose 0.1% in August, suggesting the economy remained on solid footing for much of the third quarter. * The Federal Reserve will announce its interest rate decision at the conclusion of its meeting later in the day, with the president Jerome Powell After the press conference, the Fed last cut rates in March 2020, during the COVID-19 pandemic.
* Markets now price in a 64% chance of a 50 basis point cut at the end of the two-day meeting, down from 43% on Friday. The odds of a 25 basis point cut have been sharply reduced after reports revived the prospect of more aggressive easing.
* However, most economists expect that US central bank cut rates by 25 basis points on Wednesday, according to a Reuters poll, arguing that the economy is not in enough trouble to justify the half-percentage point reduction that financial markets are anticipating.
* Zero-yield gold bullion tends to be a preferred investment in a lower interest rate environment and during geopolitical turmoil.
* On the geopolitical front, the militant group Hezbollah vowed to strike back at Israel after accusing it of setting off explosions across Lebanon on Tuesday, killing nine people and wounding nearly 3,000 others, including fighters and Iran’s envoy to Beirut.
* Spot silver fell 0.1% to $30.69 an ounce, platinum rose 0.1% to $982.79 and palladium was steady at $1,115.69.
DATA/EVENTS (GMT) 0600 UK Core CPI YY Aug 0600 UK CPI YY Aug 0600 UK CPI Services MM Aug 0900 EU HICP Final MM Aug 0900 EU HICP Final YY Aug 1230 US Housing Starts Number Aug
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