Gold prices edged lower on Tuesday as traders awaited the release of key U.S. inflation data and the Federal Reserve‘s policy meeting announcements later this week following the stronger-than-expected payrolls data on Friday.
In the UAE, gold prices saw a slight decline with 24-carat gold falling to AED279 per gram, while 22-carat gold decreased to AED258.25. Twenty-one-carat gold edged down to AED250, while 18-carat gold dipped to AED214.25.
Globally, spot gold saw a 0.28 percent decline to $2,303.8 per ounce, as of 5:07 GMT. Meanwhile, U.S. gold futures saw a 0.32 percent decline to $2,319.45.
Inflation data to impact fed projections
Gold prices saw a slight recovery after falling 3.5 percent on Friday, marking the largest drop since November 2020 following the release of the stronger-than-expected non-farm payrolls data. In addition, reports on Friday revealed that China’s central bank held off gold purchases in May for the first time in 18 months, further impacting bullion’s performance.
Traders now await the release of the U.S. consumer price index (CPI) data for May, which is major data that the Federal Reserve relies on for its policy rate forecasts and projections following the conclusion of the two-day meeting on Wednesday. Markets now expect the Fed to pencil in fewer rate cuts this year than policymakers expected three months ago amid a mixed outlook on inflation from the public. Lower interest rates reduce the opportunity cost of holding non-yielding bullion, further supporting demand for gold which could lead to an increase in the metal’s prices.
China to resume buying
China, the biggest official buyer of gold, should resume buying once prices ease further from May’s record high. Meanwhile, markets expect Vietnam to allow companies to import gold for the first time in more than 10 years as it seeks to bring local prices closer to international benchmarks.
Read: Oil prices dip ahead of key Fed meeting, U.S. inflation data release
Other precious metals
In addition to the decline in gold prices, other precious metals saw declines on Tuesday with spot silver losing 1.88 percent to $29.21. In addition, platinum saw a 1.04 percent decline to $957.46 while palladium declined 1.12 percent to $893.75.
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