Gold prices rose on Thursday as the dollar weakened and tensions in the Middle East rose, while softer-than-expected U.S. inflation data raised expectations for interest rate cuts by the Federal Reserve.
In Dubai, gold rates ticked up, with 24-carat gold gaining AED3.75 to AED405 and 22-carat gold rising AED3.5 to AED375.25. Additionally, 21-carat gold increased by AED3.5 to 359.75, while 18-carat gold inched up AED2.75 to AED308.25.
Globally, spot gold climbed 1.40 percent to $3,371.45 at 4:09 GMT. Meanwhile, U.S. gold futures rose 1.41 percent to $3,390.87.
The U.S. dollar index fell 0.29 percent to 98.35, making gold prices less expensive for holders of other currencies.
U.S. inflation data in focus
A weaker dollar served as a strong catalyst for the rise in gold prices. In addition, rising geopolitical risks supported safe-haven assets like gold, with President Donald Trump announcing on Wednesday that U.S. personnel were being moved out of the Middle East due to heightened security risks amid rising tensions with Iran.
On the economic front, U.S. consumer prices increased less than expected in May, driven by cheaper gasoline, but inflation could accelerate due to import tariffs. The data triggered renewed calls from Trump for significant rate cuts.
With promising inflation data, analysts expect the Federal Reserve to cut rates earlier than expected. Traders now expect 50 basis points of rate cut by year-end.
The market now awaits the release of U.S. producer price index data, due at 12:30 GMT.
U.S.-China trade deal reached
Triggering a rise in gold prices, U.S. President Donald Trump announced on Wednesday that a U.S.-China trade deal has been reached after negotiators from both countries agreed on a framework to remove Chinese export restrictions on rare earth minerals and other critical industrial components.
Trump added that he could extend a July 8 deadline for trade talks with other nations before higher U.S. tariffs take effect, but did not foresee such a need.
Read: Crude oil prices dip yet stay above $66.75 as OPEC+ plans production increase
Other precious metals
As gold prices rose, the precious metals market saw mixed movement. Spot silver was up 0.46 percent at $36.39 per ounce, platinum rose 1.53 percent to $1,275.10, hovering near a more than 4-year high, while palladium was down 1.05 percent at $1,068.75.
