Gold prices edged down on Tuesday, hovering near their record high as markets awaited the U.S. Federal Reserve to start its easing cycle this week with expectations of a bigger interest rate cut.
In the UAE, gold prices declined by AED1.25 with 24-carat gold inching down to AED312 and 22-carat gold declining to AED289. Meanwhile, 21-carat gold reached AED279.75 and 18-carat gold was at AED239.75.
Globally, spot gold edged down 0.30 percent to $2,575.93 as of 5:09 GMT, after hitting a new record high of $2,589.59 in the previous session. Meanwhile, U.S. gold futures fell 0.24 percent to $2,602.75.
The U.S. dollar index continued its decline, making gold less expensive for other currency holders.
Fed’s September policy meeting
As gold prices decline, market attention now turns toward the U.S. Federal Reserve’s September policy meeting on Wednesday where the central bank will likely announce at least a 25-basis-point interest rate cut.
Markets are currently pricing in a 69 percent chance of a 50-basis-point cut at the conclusion of the two-day meeting, compared to 43 percent on Friday, and a 31 percent chance of a 25-basis-point interest rate cut. Investors will also focus on U.S. retail sales data due at 12:30 GMT for more insight into the health of the economy.
In addition, the Bank of Japan is expected to keep monetary policy steady next week, but signal that further interest rate hikes are coming. The Bank of Japan will also likely highlight the progress the economy is making in sustaining inflation around its 2 percent target.
Further supporting gold prices near their all-time high was Republican presidential candidate Donald Trump’s second assassination attempt on Sunday. Political and economic instability traditionally supports gold prices as investors seek to invest in safe assets amid unstable conditions.
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Other precious metals
The precious metals market saw mixed movement as gold prices declined from their record high. Spot silver declined 0.08 percent to $30.73 while platinum and palladium inched up 0.20 percent and 0.70 percent to $982.62 and $1,084.15, respectively.
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