Gold prices rose on Tuesday as investors awaited additional cues on when the next interest rate cut will be ahead of this week’s Federal Reserve policy meeting and economic data releases.
In the UAE, gold prices edged down AED0.50 with 24-carat gold declining to AED289 while 22-carat gold slid to AED267.50. Meanwhile, 21-carat gold reached AED259 and 18-carat gold reached AED222.
Globally, spot gold rose 0.23 percent to $2,386.62, as of 5:08 GMT. Meanwhile, U.S. gold futures gained 0.24 percent to $2,431.30.
Fed to hold rates in Wednesday meeting
Gold prices rose as markets expected the Fed to keep interest rates unchanged at the end of its two-day meeting on Wednesday. However, the central bank will likely use the meeting to discuss policy easing later in the year and as early as September by acknowledging that inflation has almost reached the 2 percent target.
Investors are also awaiting the release of key economic data, particularly the nonfarm payrolls report due on Friday.
The Fed’s signals during the meeting and Friday’s jobs report may impact the U.S. dollar if investors start to price in more rate cuts for this year. Any decline in the dollar index will likely support gold prices to over the $2,400 level again. In addition, lower interest rates reduce the opportunity cost of holding non-yielding assets like gold.
The Bank of England and the Bank of Japan’s policy meetings are also due this week.
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Other precious metals
Mirroring the rise in gold prices, spot silver rose 0.18 percent to $27.91.
If silver stays above the $25 level for the rest of the year, it is unlikely that Indian imports will rise unless prices decline, stated analysts. This could lead to a decline in Indian jewelry and silverware manufacturing and demand for a second year in a row.
Palladium rose 0.10 percent to $904.51 while platinum gained 0.24 percent to $950.89. However, copper declined 0.54 percent to $4.04.
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