Gold prices rose on Monday as investors awaited the release of key U.S. inflation data and Federal Reserve officials’ comments throughout the week for insights into the potential timing of the next interest rate cut.
In the UAE, gold prices saw an AED0.5 increase with 24-carat gold rising to AED281.5 per gram, while 22-carat gold inched up to AED260.75. Twenty-one-carat gold rose to AED252.25 while 18-carat gold increased to AED216.25.
Globally, spot gold saw a 0.24 percent increase to $2,324.89 per ounce, as of 5:04 GMT. Meanwhile, U.S. gold futures gained 0.27 percent to $2,337.55.
The dollar index also saw a 0.02 percent rise which impacted gold prices, making them more expensive for holders of other currencies.
U.S. economic data
U.S. business activity rose to a 26-month high in June amid signs of recovery in employment. This pushed the dollar to its highest level in nearly eight weeks, making gold prices more expensive for other currency holders.
Traders now await the U.S. core personal consumption expenditures (PCE) price index report, the Fed’s preferred measure of inflation, due on Friday for more insights into the timing of the next rate cut and its impact on gold prices. If the inflation data is on the lower side, the Fed might lower interest rates twice this year. Lower interest rates reduce the opportunity cost of holding non-yielding assets like gold.
Markets also await Fed officials’ comments this week including San Francisco Fed President Mary Daly and Fed governors Lisa Cook and Michelle Bowman.
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Other precious metals
In line with the rise in gold prices, spot silver rose 0.15 percent to $29.56. However, platinum declined 0.02 percent to $992.30 while palladium rose 0.74 percent to $955.68.
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