Gold prices edged down on Tuesday as the dollar traded near its seven-week high while the market awaited the release of the Federal Reserve‘s last meeting minutes and additional economic data for more insight into the U.S. monetary policy trajectory.
In the UAE, gold rates rose AED0.25, with 24-carat gold rising to AED320 and 22-carat gold remaining flat at AED296.25. Meanwhile, 21-carat gold was at AED286.75, while 18-carat gold reached AED245.75.
Globally, spot gold edged down 0.02 percent to $2,642.78 as of 5:13 GMT while U.S. gold futures lost 0.18 percent to $2,661.10.
Dollar regains momentum
The dollar index declined 0.11 percent to 102.42 but remained close to its seven-week high, making gold more expensive for other currency holders. Meanwhile, the benchmark U.S. Treasury 10-year yield rose over 4 percent for the first time in more than two months.
The recovery of both the dollar and the bond yields has impacted gold prices. However, geopolitical tensions remain tailwinds, driving safe-haven demand for bullion amid economic and political uncertainty.
Fed’s meeting minutes
Investor focus now shifts to the Fed’s latest policy meeting minutes due on Wednesday in addition to the U.S. Consumer Price Index on Thursday and the Producer Price Index data on Friday. Moreover, traders await comments from several Fed officials this week to gauge the size of the next interest rate cut.
If the U.S. inflation data signals a rise in price pressures, gold prices may witness downward pressure as the dollar rises further.
Last week’s stronger-than-expected jobs report impacted market expectations for a 50-basis-point rate cut during the Fed’s November meeting. Markets are no longer pricing in a 50-basis-point reduction and now see an 87 percent chance for a 25-basis-point cut, according to the CME FedWatch tool.
Read: UAE, global gold prices ease as bets firm for smaller U.S. rate cut in November
Other precious metals
As gold prices eased, the precious metals market saw a downward movement. Spot silver dipped 1.07 percent to $31.38 per ounce, platinum declined 0.61 percent to $966.26, and palladium slipped 2.12 percent to $1,002.30.
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