Gold prices declined on Tuesday as investors awaited the release of U.S. economic data this week for additional insight into the Federal Reserve‘s interest rate cut.
In the UAE, gold prices declined over AED0.5 with 24-carat gold inching down to AED290.25 per gram, while 22-carat gold declined to AED268.75. Twenty-one-carat gold reached AED260.25 while 18-carat gold reached AED223.
Globally, spot gold declined 0.03 percent to $2,395.11, as of 5:11 GMT. Meanwhile, U.S. gold futures gained 0.06 percent to $2,396.15.
The dollar remained weaker, declining 0.07 percent to 104.24, making greenback-priced bullion cheaper for other currency holders.
U.S. economic data
As gold prices continue their decline, traders await the U.S. second-quarter gross domestic product (GDP) report on Thursday and the June personal consumption expenditures (PCE) data on Friday.
Gold prices reached a record high of $2,483.60 last week as markets expected a 25-basis-point U.S. interest rate cut by September. Lower interest rates reduce the opportunity cost of holding non-yielding assets like gold.
U.S. elections
U.S. Vice President Kamala Harris has gained support for her surprise presidential run after President Joe Biden dropped out of the race.
Meanwhile, Donald Trump pledged to cut corporate taxes and interest rates in his campaign. Lower tax revenues could raise the U.S. federal government’s budget deficit. Investors expect the deficit to keep deteriorating under a second Democratic administration too.
As the United States gets ready for the elections, markets have seen a lack of pre-election commodities trade. However, gold remains a standout. Factors like political uncertainty and concerns over fiscal debt, tariffs and trade policies bode well for gold prices and raise bullion’s safe-haven appeal.
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Other precious metals
The precious metals market was in line with the decline in gold prices. Spot silver declined 0.72 percent to $28.99. Meanwhile, palladium lost 0.01 percent to $907.88 while copper declined 0.01 percent to $4.18. Platinum also lost 0.07 percent to $946.63.
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