Gold prices saw an increase on Friday and were on track for their first weekly gain in four weeks despite falling over 1 percent in the previous session after the U.S. Federal Reserve said it expected only one interest rate cut this year.
In the UAE, gold prices declined with 24-carat gold falling to AED279.25 per gram, while 22-carat gold decreased to AED258.50. Twenty-one-carat gold declined to AED250.25 while 18-carat gold reached AED214.50.
Globally, spot gold saw a 0.09 percent increase to $2,306.22 per ounce, as of 5:14 GMT. Meanwhile, U.S. gold futures rose 0.15 percent to $2,321.50.
Fed rate cut projections
Federal Reserve policymakers on Wednesday pushed their projections for an interest rate cut to as late as December, meaning that they will go through with only one rate cut this year. Markets had previously bet on two rate cuts in 2024, but despite slowing inflation, Fed projections implied a more cautious stance on altering policy rates. According to the U.S. Department of Labor, prices rose 3.3 percent in May, down 0.1 percentage points from the month before. Meanwhile, core prices rose 0.2 percent. Lower interest rates reduce the opportunity cost of holding non-yielding assets like gold, thus raising its demand and prices.
In addition to slowing inflation, U.S. producer prices surprisingly fell in May amid lower energy costs, indicating that inflation subsided after surging in the first three months of the year. Despite the dollar index rising 0.13 percent, gold prices remained on an upward trend.
Read: Oil prices decline but remain on course for weekly gains amid OPEC optimism
Other precious metals
Amid the rise in gold prices, the metals market saw mixed movement with spot silver falling 0.38 percent to $28.89 per ounce. Meanwhile, platinum rose 0.91 percent to $955.13 and palladium gained 0.65 percent to $888.57.
For more news on markets, click here.
