Gold prices inched down on Tuesday as investors awaited the release of key U.S. inflation and gross domestic product (GDP) data later this week for more insights into the Federal Reserve‘s interest rate cut stance.
In the UAE, gold prices saw an AED0.25 decline with 24-carat gold inching down to AED281.75 per gram, while 22-carat gold remained stable at AED261. Twenty-one-carat gold declined to AED252.50 while 18-carat gold reached AED216.50.
Globally, spot gold saw a 0.11 percent decline to $2,328.41 per ounce, as of 5:11 GMT. Meanwhile, U.S. gold futures lost 0.17 percent to $2,340.35.
U.S. economic data’s impact on bullion
Gold prices declined over 1 percent on Friday after U.S. business activity rose to a 26-month high in June amid a rebound in employment which supported a rise in the dollar index.
First-quarter U.S. GDP estimates are due on Thursday and the personal consumption expenditures (PCE) price index report on Friday. If PCE data reveals an increase in inflation, gold prices may decline below the $2,300 level. The Federal Reserve also awaits the release of both indicators to gauge the level of economic health and the timing of the next interest rate cut. Lower rates reduce the opportunity cost of holding non-yielding assets like gold.
San Francisco Federal Reserve Bank President Mary Daly said on Monday that she does not believe the central bank should cut interest rates before policymakers are confident that inflation is on track to 2 percent. However, she also noted that rising unemployment is increasingly a risk.
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Other precious metals
Despite the decline in gold prices, the metals market saw mixed movement on Tuesday. Spot silver declined 0.38 percent to $29.52. However, platinum rose 0.83 percent to $1,002.65 while palladium gained 1.25 percent to $991.37.
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