Gold prices declined on Wednesday as the U.S. dollar rebounded, countering the rise in safe-haven demand for bullion amid rising geopolitical tensions across the Middle East.
In the UAE, gold rates dipped AED1.75 with 24-carat gold declining to AED321.50 after rising to AED323.25 in the previous session, and 22-carat gold falling to AED297.75. Meanwhile, 21-carat gold reached AED288 and 18-carat gold was at AED247.
Globally, spot gold lost 0.22 percent to $2,654.56 as of 5:11 GMT, marking almost a 7 percent increase in the last month. Meanwhile, U.S. gold futures fell 0.53 percent to $2,676.15.
The dollar index recorded its sharpest rise in a week in the previous session.
Mideast geopolitical tensions escalate
Gold prices held steady above the $2,650 level as tensions between Israel and Iran escalated on Tuesday night, raising fears of a wider war. Despite the recovery of the U.S. dollar, gold maintains its safe-haven appeal amid political and economic uncertainty.
Following its sharp rise in the previous session, the dollar held onto its gains, rising 0.08 percent to 101.28, making gold more expensive for other currency holders.
U.S. labor market data
On the economic front, markets will closely monitor the ADP employment data and comments from several Federal Reserve officials later in the day, along with the ISM services data and nonfarm payrolls (NFP) due later in the week. Positive indicators in the ISM and NFP reports could reduce bets of another large interest rate cut in November, impacting gold prices further.
Traders currently see a 63 percent chance of a 25-basis-point cut in November and a 37 percent chance of a 50-basis-point cut, according to the CME FedWatch tool.
Meanwhile, analysts noted a decline in physical demand for gold in key markets due to the recent surge in prices.
Read: Oman Central Bank issues treasury bills worth $117 million
Other precious metals
The precious metals market saw mixed movement as gold prices declined further. Spot silver lost 0.63 percent to $31.21 while platinum gained 0.30 percent to $988.94. Palladium also rose 0.65 percent to $1,001.20 while copper declined 0.29 percent to $4.52.
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