Gold strengthened on Wednesday as the U.S. dollar and Treasury yields declined, with market participants closely observing the delicate truce between Israel and Iran.
In Dubai, gold rates saw an uptick, with 24-carat gold rising to AED403.50, and 22-carat gold also climbing to AED373.75. Additionally, 21-carat gold saw an increase to AED358.00, while 18-carat gold rose to AED307.25.
As of 02:50 GMT, spot gold was up 0.2 percent at $3,328.89 per ounce, following a drop to a more than two-week low on Tuesday. Currently, spot gold is trading above $3,327.
U.S. gold futures increased by 0.3 percent to $3,343.00 (currently trading above $3,342). The dollar index remained near a one-week low, rendering bullion more appealing to holders of other currencies. The benchmark 10-year Treasury yields lingered close to a more than one-month low.
“The technical selling of the U.S. dollar and weaker U.S. Treasury yield have benefited gold prices,” reported Reuters, citing OANDA senior market analyst Kelvin Wong. He noted that a potential catalyst for a gold breakout might be further weakness in the dollar, along with renewed attention on the fiscal deficit and U.S. tariff policy as tensions between Iran and Israel ease.
On Tuesday, Iran and Israel indicated that their air conflict had concluded, at least temporarily.Â
Decline in U.S. consumer confidence
U.S. consumer confidence unexpectedly declined in June as households grew increasingly concerned about job availability, another sign that labor market conditions were softening amid rising uncertainties from Trump’s tariffs.
Higher tariffs could start to elevate inflation this summer, a crucial period for the U.S. Federal Reserve‘s evaluation of possible rate cuts, Fed Chair Jerome Powell informed members of Congress on Tuesday.
Fed funds futures traders are currently pricing in 60 basis points of rate cuts for 2025, with the first adjustment anticipated in September.
According to a report by the Official Monetary and Financial Institutions Forum, one in three central banks managing a combined $5 trillion plans to increase their exposure to gold over the next 1-2 years, marking the highest intention in at least five years.
Elsewhere, spot silver remained steady at $35.90 per ounce, platinum fell by 0.3 percent to $1,312.56, while palladium decreased by 0.5 percent to $1,060.50.
