UAE gold prices down, global rates set for monthly gain as focus shifts to U.S. economic data

Gold prices declined on Friday but were set for a monthly gain as hopes for a U.S. interest rate cut in September rose while traders awaited key U.S. inflation data for further insights.

In the UAE, gold prices declined AED0.25 with 24-carat gold inching down to AED304.25 and 22-carat gold declining to AED281.75. Meanwhile, 21-carat gold reached AED272.75 and 18-carat gold hit AED233.75.

Globally, spot gold declined 0.21 percent to $2,514.03 as of 5:09 GMT after hitting a record high of $2,531.60 on August 20. Gold prices gained almost 3 percent in the last 30 days, marking their second consecutive monthly gain. Meanwhile, U.S. gold futures fell 0.49 percent to $2,547.80.

U.S. economic data

Gold prices declined as traders awaited the release of the personal consumption expenditures (PCE) data, the Fed’s preferred inflation measure, due later in the day to assess the central bank’s policy outlook.

In a separate release, the U.S. gross domestic product grew at a 3 percent annualized rate last quarter, up from the 2.8 percent rate reported last month, while consumer spending rose to 2.9 percent, revised up from 2.3 percent.

As for labor market data, another report revealed that weekly initial jobless claims slipped to 231,000 last week, slightly below the estimate of economists.

Traders have fully priced in a Federal Reserve interest rate cut next month, with a 66 percent chance of a 25-basis-point cut and a 34 percent chance of a bigger 50-basis-point reduction, according to the CME FedWatch tool. Lower interest rates bolster the appeal of non-yielding assets like gold.

Amid the persisting geopolitical tensions in the Middle East, gold is traditionally a hedge against geopolitical and economic uncertainties.

Elsewhere, SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings rose 0.13 percent to 857.27 metric tons on Thursday.

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Other precious metals

Amid the decline in gold prices, spot silver dipped 0.24 percent to $29.37 while platinum gained 0.37 percent to $941.15. Palladium also recorded an increase of 0.17 percent to $981.58.

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