Gold prices inched up on Wednesday despite the U.S. dollar and Treasury yields strengthening as traders awaited additional insight into the size of the Federal Reserve‘s possible September interest rate cut.
In the UAE, gold prices declined by AED2.5 with 24-carat gold inching down to AED289.75 while 22-carat gold declined to AED268.25. Meanwhile, 21-carat gold reached AED259.75 and 18-carat gold reached AED222.50. Gold prices in the UAE have lost around AED7 so far this week.
Globally, spot gold rose 0.39 percent to $2,393.26, as of 5:10 GMT. Meanwhile, U.S. gold futures gained 0.09 percent to $2,433.80.
The dollar index rose 0.34 percent to 103.32, making greenback-priced bullion less affordable for other currency holders.
Dollar rebounds
Gold prices rose despite U.S. Treasury yields and the dollar rebounding, which traditionally places some downward pressures on bullion. Recent U.S. economic data reveals that the economy is still resilient in some areas, prompting investors to reassess recession concerns.
Rising geopolitical tensions in the Middle East have supported gold prices as safe-haven demand rises. However, global recession concerns still persist as markets await further economic data for clarity on the U.S. economy’s health.
Traders have shifted their interest rate cut expectations following the soft U.S. jobs report last week, with nearly 105 basis points of cuts anticipated by the end of the year. However, markets are also pricing in a 65 percent chance of a 50 basis point rate cut in September, the CME FedWatch tool revealed, compared with 85 percent in the previous session.
Read: UAE Central Bank’s gold reserves surge 19.7 percent YoY in May 2024 to $5.61 billion
Other precious metals
The precious metals market generally mirrored the rise in gold prices. Spot silver rose 0.66 percent to $27.22 while platinum gained 0.81 percent to $919.53. In addition, palladium rose 0.70 percent to $880.75 while copper declined 0.16 percent to $4.00.
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