Gold prices dipped on Monday from their record high but still traded above the $2,500 level as traders booked profits on rising bets of a U.S. interest rate cut next month.
In the UAE, gold prices lost AED1 with 24-carat gold inching down to AED302.75 while 22-carat gold declined to AED280.25. Meanwhile, 21-carat gold reached AED271.50 and 18-carat gold reached AED232.75.
Globally, spot gold declined 0.20 percent to $2,500.97, as of 5:05 GMT, after hitting an all-time high of $2,509.65 on Friday. Meanwhile, U.S. gold futures inched up 0.09 percent to $2,540.00.
September rate cut bets boost bullion
Gold prices declined after hitting a record high on growing optimism surrounding the likelihood of a Federal Reserve interest rate cut next month. The U.S. monetary policy in addition to rising geopolitical tensions and robust central bank buying have propelled gold prices over 20 percent higher so far this year.
Last week, strong U.S. retail sales data, lower-than-expected unemployment claims, and a mild inflation report restored confidence in the world’s largest economy. The market has fully priced in a rate cut next month but the focus now shifts to the size of the cut. Traders see a 75.5 percent chance of a 25-basis-point cut, according to the CME FedWatch tool.
Investors now also await Fed Chair Jerome Powell’s comments on Friday and the minutes of the Fed’s July policy meeting on Wednesday for further insight.
Despite the surge in prices to their highest levels, several Chinese banks have been given new gold import quotas from the central bank, signaling renewed demand.
Read: DFM, SZSE partner to strengthen UAE-China capital market ties, enhance cross-border investment
Other precious metals
In line with the decline in gold prices, the precious metals market saw an overall downward movement. Spot silver declined 0.14 percent to $28.97, platinum fell 0.24 percent to $952.12, and palladium lost 0.85 percent to $942.87.
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