Gold prices climbed on Thursday after the Federal Reserve warned of rising inflation and labor market risks fuelling economic uncertainty, while investors awaited the outcome of the U.S.-China trade talks this weekend.
In Dubai, gold rates held steady near their record high, with 24-carat gold holding at AED409 and 22-carat gold remaining at AED378.5. Additionally, 21-carat gold was at AED363 and 18-carat gold remained at AED311.25.
Globally, spot gold gained 0.17 percent to $3,391.7, as of 4:25 GMT, while U.S. gold futures rose 0.19 percent to $3,398.34. Bullion has gained close to 10 percent in the last 30 days, rising to an all-time high of $3,500.05 on April 22.
Fed holds interest rates steady
Gold prices rose after the Fed held interest rates steady on Wednesday, but said risks of higher inflation and unemployment rose, further raising uncertainty regarding the U.S. economic outlook, as policymakers grapple with the impact of President Donald Trump’s tariffs.
Fed Chair Jerome Powell said it isn’t clear if the economy will continue its steady growth or decline under mounting uncertainty and a possible spike in inflation. Traders are now expecting rate cuts of 77 basis points this year, starting in September. Gold, a safe haven against political and financial turmoils, thrives in a low-interest-rate environment.
Powell added that if either side of the dual mandate veers too far off course, the Fed would evaluate which policy tools to use to rebalance. When asked which mandate—inflation or employment—requires more focus, he responded that it is too early to say.
China, U.S. talks boost market sentiment
On Wednesday, Trump suggested China initiated the upcoming senior-level trade talks between the two countries and said he was not willing to cut import tariffs on Chinese goods to get Beijing to the negotiating table. U.S. and Chinese officials are due to hold talks in Switzerland this weekend.
U.S. Treasury Secretary Scott Bessent and China’s Vice Premier He Lifeng will meet in Switzerland this weekend, which calmed investors’ fears about the “trade war.” Hence, the Greenback recovered some ground as traders booked profits and bought the U.S. dollar against its peers. Currently, the dollar is trading 0.06 percent higher at 99.67, making gold prices more expensive for other currency holders.
Other precious metals
In line with the rise in gold prices, the precious metals market was largely up on Thursday. Spot silver rose 1.32 percent to $32.90, while platinum gained 1.06 percent to $984.38. However, palladium edged down 0.39 percent to $968.62.
