Gold prices in the UAE surged to a new record high on Thursday, following comments from Federal Reserve officials hinting at potential interest rate cuts later in 2024. The uncertainty surrounding the timing of these cuts, coupled with anticipation for crucial U.S. jobs data, has sent shockwaves through the precious metals market.
Twenty-four-carat gold climbed to AED278.25, while 22-carat gold reached AED257.50. Twenty-one-carat gold surged to AED249.25 while 18-carat gold rose to AED213.75.
Globally, spot gold remained stable at $2,299.96 per ounce, as of 5:23 GMT, and hit a record high of $2,304.09 earlier in the session. Meanwhile, U.S. gold futures gained 0.13 percent, recording $2,318. Notably, gold prices have reached new record highs in each session since last Thursday.
Federal Reserve’s ambiguous stance
Federal Reserve officials, including the central bank’s chief Jerome Powell, reiterated the possibility of interest rate cuts in 2024. However, the exact timing remains uncertain as they stress the need for further debate and data analysis before making any decisive moves. This ambiguity has left traders on edge, fueling the surge in gold prices as investors seek refuge from volatile markets.
Meanwhile, the U.S. services industry witnessed a slowdown in growth during March, offering a glimmer of hope for inflation control. With the impending release of the U.S. jobs report for March, investors are closely monitoring the data for insights into the state of the economy. Analysts believe that weaker-than-expected job market performance could pave the way for interest rate cuts, further boosting gold prices. Hence, lower interest rates reduce the opportunity cost of holding bullion. The U.S. jobs report for March is due on Friday, with new inflation data coming next week.
Analysts also shed light on the driving forces behind the unprecedented surge in gold prices. They emphasized the global depreciation of currencies against the U.S. dollar as a key factor, driving investors towards gold as a safe haven amid currency devaluation concerns.
Read: Oil prices approach $90 as Middle East tensions intensify, OPEC output remains steady
Other precious metals
The surge in gold prices was mirrored by fluctuations in other precious metals. Spot silver saw a 0.5 percent decline to $27.08 per ounce, platinum also declined by 0.1 percent to $935.39. Meanwhile, palladium saw a 0.4 percent increase to $1.017.83.
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