Gold prices fell on Monday as the potential easing of geopolitical tensions reduced safe-haven demand, with investor attention shifting to upcoming U.S. inflation data that could shed light on the Federal Reserve’s interest rate outlook.
In Dubai, gold rates declined, with 24-carat gold dipping AED2.5 to AED406.75 and 22-carat gold falling AED2.25 to AED376.75. Furthermore, 21-carat gold declined AED2.25 to AED361.25, while 18-carat gold fell AED2, reaching AED309.5.
Globally, spot gold declined 0.65 percent to $3,378.18 as of 5:58 GMT, after hitting its highest since July 23 on Friday. Meanwhile, U.S. gold futures for December delivery dropped 1.48 percent to $3,439.8.
U.S.-Russia talks ease safe-haven demand
Easing geopolitical tensions over the war in Ukraine pushed gold prices lower, following Friday’s announcement that President Donald Trump will meet Vladimir Putin in the United States. Trump announced on Friday that he will meet with Putin in Alaska on August 15 to negotiate an end to the war in Ukraine.
This week, attention will turn to U.S. consumer price data due on Tuesday, with analysts expecting tariffs to push core inflation up 0.3 percent, bringing the annual rate to 3 percent—above the Federal Reserve’s 2 percent target. A strong inflation report could boost the dollar further and limit gold’s upside, but analysts expect support for gold to hold overall as investors look to buy at lower prices.
Markets expect two rate cuts this year
A recent U.S. jobs report that came in softer than expected has increased expectations for a Federal Reserve rate cut in September. Markets are now pricing in about a 90 percent chance of easing next month, with at least one more cut anticipated by the end of the year.
Gold, which doesn’t yield interest, tends to perform well in a low-rate environment.
Trade talks are also in focus as President Trump’s August 12 deadline for reaching a deal with Beijing approaches.
Read: Crude oil prices fall to $66.21 as market awaits outcome of U.S.-Russia talks on Ukraine
Other precious metals
As gold prices declined, the precious metals market saw mixed movement on Monday. Spot silver fell 0.59 percent to $38.10, while platinum dipped 1.12 percent to $1,316.97. However, palladium gained 0.10 percent to $1,127.24.
