Gold prices rose for a third consecutive session on Thursday, boosted by growing expectations that the U.S. Federal Reserve will cut interest rates in September after July inflation rose at a moderate pace, which in turn pressured the dollar.
In Dubai, gold rates were down, with 24-carat gold losing AED0.5 to AED405. Similarly, 22-carat gold fell AED0.5 to AED375. Additionally, 21-carat gold declined AED0.75 to AED359.5, while 18-carat gold dipped 0.5 to AED308.25.
Globally, spot gold rose 0.11 percent to $3,361.55, as of 4:45 GMT. Meanwhile, U.S. gold futures for December delivery held steady at $3,408.4.
Traders bet on outsized Fed rate cut
Traders are betting on the possibility of a 50-basis-point Fed rate cut in September, pushing the dollar lower, lifting gold prices and driving yields down. Analysts noted that gold’s technical outlook remains bullish, with the trend pointing higher, and a sustained break above the $3,400 level is seen as key.
Meanwhile, the dollar remained near multi-week lows against its rivals, making gold prices less expensive for holders of other currencies. In addition, benchmark U.S. 10-year Treasury yields hovered near a one-week low.
U.S. consumer prices posted only a slight increase in July, bolstering expectations for a Federal Reserve rate cut next month. Treasury Secretary Scott Bessent said there is a good chance of a 50-basis-point cut, with traders now seeing a cut on September 17 as a near certainty.
Market odds for a quarter-point reduction at the September 16–17 meeting reached 99.9 percent, according to the CME FedWatch tool, while expectations for a 50-basis-point cut were at 6 percent, according to data compiled by LSEG. Non-yielding assets like gold tend to thrive in a low-interest-rate environment.
Investors are closely watching U.S. economic releases scheduled later this week—including the Producer Price Index, weekly jobless claims and retail sales—for further insights into the Federal Reserve’s likely path on interest rates and its impact on gold prices.
Trump-Putin peace talks in focus
On the geopolitical front, Ukrainian President Volodymyr Zelenskiy said he cautioned U.S. President Donald Trump ahead of his meeting with Vladimir Putin that the Russian leader was “bluffing” regarding his intentions to end the war.
On Wednesday, Trump warned of “severe consequences” if Putin refuses to agree to peace in Ukraine, without detailing what those repercussions might entail. However, he previously threatened economic sanctions should Friday’s meeting in Alaska fail to produce results.
Earlier this week, gold prices fell as the potential easing of geopolitical tensions reduced safe-haven demand, with investor attention shifting to Trump-Putin peace talks and their outcome.
Read: Crude oil prices rise from 2-month low to $65.86 ahead of Trump’s meeting with Putin
Other precious metals
As gold prices rose, the precious metals market saw mixed movement on Thursday. Spot silver rose 0.12 percent to $38.54, while platinum dipped 0.24 percent to $1,336.44. However, palladium gained 1.60 percent to $1,140.24.
