Gold eases to $4,127 an ounce ahead of Fed's October meeting

Gold prices edged lower in early Asian trading on October 20 as traders positioned for the Federal Reserve's policy meeting on October 27-28, Reuters reported.

Spot gold was down 0.3% at $4,126.84 an ounce as of 0102 GMT, and the December contract on US futures markets also lost 0.3%, to $4,146.00.

Attention has turned to the Fed decision and to the Personal Consumption Expenditures price index, the inflation measure the central bank uses in pursuing its 2% goal, which is also due in the final week of October. The Fed lifted its benchmark overnight rate by 25 basis points in September to a range of 3.75% to 4.00%.

Pricing in CME's FedWatch tool put the odds of no change at the October meeting at 83%, while the probability of an increase in December stood at 94%. Rising rates tend to pressure bullion because it generates no yield.

Kazuo Ueda, governor of the Bank of Japan, said underlying inflation there is "quite close" to the 2% target, pointing to a tight labor market and global demand tied to artificial intelligence.

Other precious metals also fell. Silver dropped 0.7% to $56.69 an ounce and palladium slipped 0.7% to $1,112.08, while platinum held at $1,639.65.

This story was first reported by CNBC TV18.