Gold prices declined on Monday despite U.S. inflation slowing down, which raised hopes for an interest rate cut by the Federal Reserve this year.
In the UAE, gold prices saw an AED0.5 decline with 24-carat gold inching down to AED281.25 per gram, while 22-carat gold declined to AED260.50 Twenty-one-carat gold was at AED252.25 while 18-carat gold reached AED216.25.
Globally, spot gold saw a 0.10 percent decline to $2,322.58 per ounce, as of 5:12 GMT, gaining over 4 percent in the second quarter. Meanwhile, U.S. gold futures lost 0.31 percent to $2,332.25.
U.S. inflation slows
Gold prices declined after U.S. personal consumption expenditures (PCE) index data revealed on Friday an increase of 2.6 percent in May after a 2.7 percent rise in April, in line with economists’ projections. Following the release of the inflation data, traders are pricing in a 64 percent chance of an interest rate cut in September, according to the CME FedWatch tool. Lower interest rates reduce the opportunity cost of holding non-yielding assets like gold.
Market focus now shifts to Fed chair Jerome Powell, who will share his remarks on Tuesday. Investors also await the minutes from the Fed’s latest policy meeting on Wednesday and U.S. labor market data later in the week and its impact on gold prices.
Other precious metals
Despite the decline in gold prices, the metals market saw mixed movement. Spot silver was down 0.40 percent to $29.01 while platinum lost 0.30 percent to $990.20. However, palladium rose 0.05 percent to $972.91.
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