Gold prices edged up on Thursday as traders awaited the release of key U.S. inflation data due later in the day for more insight into the Federal Reserve‘s next policy move.
In the UAE, gold rates inched down AED0.5, with 24-carat gold declining to AED316.50 and 22-carat gold dipping to AED293. Meanwhile, 21-carat gold and 18-carat gold fell AED0.25 to AED283.75 and AED243.25, respectively.
Globally, spot gold gained 0.23 percent to $2,614.19 as of 5:10 GMT while U.S. gold futures rose 0.20 percent to $2,631.20.
The U.S. dollar index declined 0.03 percent to 102.89, making bullion more attractive to other currency holders.
U.S. inflation data
Gold prices saw positive movement as markets awaited the release of the U.S. Consumer Price Index (CPI) for September at 1230 GMT and the Producer Price Index (PPI) data on Friday. Analysts noted that if the CPI data shows a rise in inflation, U.S. Treasury yields will rise, impacting gold prices.
Traders are currently pricing an 84.7 percent chance of a 25-basis-point cut in November, according to the CME FedWatch tool.
“A substantial majority of participants supported lowering the target range for the federal funds rate by 50 basis points”, at the Fed’s September meeting.
Middle East geopolitical landscape to support bullion
Tensions in the Middle East continue to raise gold’s safe-haven appeal. However, analysts said that a geopolitical shock in the region in addition to the Fed’s easing cycle may propel gold prices to scale a new record high this year.
A lower interest rate environment in addition to economic and political uncertainty, boosts bullion’s appeal to investors.
San Francisco Fed Bank President Mary Daly said one or two more rate cuts this year are on the table if the economy evolves as she expects. Meanwhile, Dallas Fed Bank President Lorie Logan called for gradual easing and said that the U.S. central bank should not rush.
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Other precious metals
The precious metals market recorded gains as gold prices rose. Spot silver fell 0.07 percent to $30.49 per ounce while platinum rallied 1.76 percent to $961.65, and palladium gained 1.33 percent to $1,053.50.
