Gold prices declined on Thursday as traders awaited the release of key U.S. economic data that may provide further insight into the size of the Federal Reserve‘s next interest rate cut this year.
In the UAE, gold rates dipped AED0.5 with 24-carat gold declining to AED321.50 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 0.19 percent to $2,655.2 as of 5:06 GMT, holding steady above the $2,650 level. Meanwhile, U.S. gold futures rose 0.24 percent to $2,676.15.
The dollar index continued its rebound, gaining 0.10 percent to 101.78, and making gold more expensive for other currency holders.
Investors bet on quarter-point rate cut
Despite the recent recovery in the dollar, gold prices held onto some of their previous gains as the market awaited the release of the ISM services data and the initial jobless claims report, due later in the day, in addition to the U.S. non-farm payroll data on Friday.
Data on Wednesday revealed that U.S. private payrolls increased more than expected in September, further signaling stabilizing labor market conditions.
Investors are currently pricing a 36.6 percent chance of a 50-basis-points rate cut at the Fed’s November meeting, down from 57 percent last week, and a 66.4 percent chance of a smaller quarter-point cut, according to the CME FedWatch Tool.
Middle East tensions persist
Persistent tensions between Israel and Lebanon continue to raise concerns regarding escalation into a wider regional conflict. In addition to the upcoming U.S. elections, regional tensions will likely continue supporting gold prices.
A low interest rate environment and political turmoil traditionally boost gold prices.
Other precious metals
The precious metals market recorded declines as gold prices edged down. Spot silver lost 0.82 percent to $31.60 while platinum declined 0.77 percent to $994.78. In addition, Palladium slipped 1.39 percent to $1,001.05 while copper rose 0.33 percent to $4.61.
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