Gold prices fell further on Monday as U.S. inflation data suggested that a smaller Federal Reserve interest rate cut this month was more likely.
In the UAE, gold prices remained steady with 24-carat gold recording AED303.25 and 22-carat gold remaining stable at AED280.75. Meanwhile, 21-carat gold was at AED271.75 and 18-carat gold remained at AED233.
Globally, spot gold declined 0.24 percent to $2,496.82 as of 5:05 GMT after hitting a session low of $2,494.15 on Friday. However, gold prices gained over 4 percent in the last 30 days, marking their second consecutive monthly gain. Meanwhile, U.S. gold futures rose 0.05 percent to $2,528.90.
U.S. inflation data diminishes larger rate cut hopes
Gold prices declined after data on Friday revealed that U.S. consumer spending increased at a solid pace in July, which dwindled hopes for a half-percentage-point interest rate cut from the Fed this month. The U.S. personal consumption expenditures (PCE) price index rose 0.2 percent last month, in line with expectations, after an unrevised 0.1 percent increase in June.
The U.S. central bank will likely begin easing the monetary policy during its meeting on September 17-18. Traders have now priced in a 67 percent chance of a 25-basis-point reduction by the Fed this month and a 33 percent chance of a 50-basis-point cut, according to the CME FedWatch tool. Lower interest rates bolster the appeal of non-yielding assets like gold.
Investors are now awaiting the release of the ADP employment data and U.S. non-farm payroll report due later this week for more insight into the economy’s health and monetary policy easing cycle.
Elsewhere, geopolitical tensions in the Middle East persisted, remaining a support to gold prices.
Read: UAE’s ADX sees $507.2 million in ETF trading value during eight months of 2024
Other precious metals
Amid the decline in gold prices, spot silver dipped 1.41 percent to $28.44 while platinum lost 0.23 percent to $923.84. Palladium, however, recorded an increase of 0.01 percent to $965.35.
For more news on markets, click here.
