Gold prices rose on Friday as investors awaited the release of the U.S. payrolls data, which could provide additional insight into the Federal Reserve’s interest rate path. As the U.S. gears up for the presidential election, uncertainty surrounding the result has worried investors who have refrained from making big moves amid political and economic uncertainty.
In the UAE, gold rates dipped AED3 with 24-carat gold declining to AED333.25 and 22-carat gold inching down to AED308.50. In addition, 21-carat fell AED2.75 to AED298.75 while 18-carat gold lost AED2.5 to AED256.
Globally, spot gold rose 0.51 percent to $2,756.49 per ounce, after hitting a record high of $2,790.15 in the previous session, while December gold futures gained 0.61 percent to $2,766.20 per ounce.
U.S. election nears
Gold prices recovered some of their losses on Friday after falling to the $2,730 level on Thursday following their rise to an all-time high. The uncertainties surrounding the U.S. presidential election and the ongoing geopolitical tensions in the Middle East have provided some support to the precious metal, a traditional safe-haven asset.
However, the rising U.S. treasury bond yields and a stronger U.S. dollar may have also weighed on bullion. Despite this downward pressure, gold maintains its upward bias as U.S. election risks persist ahead of the Fed’s rate cut decision.
As the U.S. election nears, opinion polls signal a very tight race between Republican former U.S. President Donald Trump and Democratic Vice President Kamala Harris, further fueling the rise in gold prices. According to RealClear Polling, Trump is currently leading Harris in the presidential race, with the averages of Trump and Harris at 48.4 and 48.1 percent, respectively.
U.S. economic landscape
Gold prices have gained over 4 percent in October amid safe-haven flows spurred by the Middle East tensions and U.S. election uncertainty.
Market focus now shifts to the U.S. nonfarm payrolls report, due at 12:30 GMT, for additional clues about the health of the world’s largest economy. A stronger report could prompt bets for less aggressive policy easing by the Fed, exerting some selling pressure on the non-yielding yellow metal.
Other reports this week included the U.S. personal consumption expenditures (PCE) price index, which rose 2.1 percent annually in September, compared to 2.2 percent in August. This figure was in line with market expectations. The monthly PCE increased by 0.2 percent, as expected.
Meanwhile, the core PCE price index, which excludes volatile food and energy prices, rose 2.7 percent in the same period, matching August’s rise and above market expectations of 2.6 percent. The core PCE price index rose 0.3 percent on a monthly basis. In addition, U.S. initial jobless claims for the week ending October 26 fell from 228,000 to 216,000, below market forecasts of 230,000.
With no signs of recession and inflation declining, the U.S. economy is holding steady, raising questions about how quickly the Fed will lower rates. Markets are currently pricing in a 100 percent chance for a 25-basis-points rate cut by the Fed in the November meeting, according to the CME FedWatch tool.
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Other precious metals
As gold prices retreated from their all-time high, the precious metals market saw positive momentum with spot silver rising 0.23 percent to $32.72 per ounce and platinum gaining 0.06 percent to $988.35. Palladium was also positive, rising 0.10 percent to $1,106.75 after hitting a 10-month high last week.
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