Gold prices declined on Wednesday as investors awaited the release of the Federal Reserve‘s latest policy meeting minutes for additional insights into the central bank’s interest rate trajectory.
In the UAE, gold rates fell AED1.5, with 24-carat gold declining to AED317 and 22-carat gold dipping to AED293.50. Meanwhile, 21-carat gold was at AED284, while 18-carat gold reached AED243.50.
Globally, spot gold edged down 0.05 percent to $2,620.82 as of 5:17 GMT while U.S. gold futures gained 0.14 percent to $2,639.
The U.S. dollar index rose 0.06 percent to 102.61 earlier in the session, inching closer to the seven-week high it recorded last week. A stronger dollar makes gold less attractive to other currency holders.
U.S. economic data
Despite the recent downward movement in prices, gold has held its ground above the $2,600 mark due to several supportive factors including rising tensions in the Middle East and the economic and political uncertainty in the U.S. ahead of the presidential elections.
Traders will await the release of the Fed’s September policy meeting minutes later today in addition to the U.S. Consumer Price Index (CPI) report on Thursday and the Producer Price Index (PPI) data on Friday. If the CPI data signals a rise in inflation, gold prices may get a boost.
Markets are no longer expecting a 50-basis-point cut next month, following last week’s strong jobs report. They now see an 89 percent chance for a 25-basis-point reduction, according to the CME FedWatch tool.
Susan Collins, Boston Fed president, noted on Tuesday that weakening inflation trends will likely support additional rate cuts by the central bank.
In its latest release, the World Gold Council said that global physically backed gold exchange-traded funds saw their fifth consecutive monthly inflow in September, attracting $1.4 billion.
Read: Oil prices rebound as market reacts to U.S. inventory surge, Middle East tensions ease
Other precious metals
The precious metals market saw mixed movement as gold prices continued to decline. Spot silver fell 0.53 percent to $30.54 per ounce while platinum gained 0.16 percent to $951.50, and palladium slipped 0.24 percent to $1,019.25.
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