Gold prices declined on Tuesday after hitting over a one-week high as investors awaited the release of key U.S. inflation data which could hint at the Federal Reserve‘s next policy move.
In the UAE, gold prices rose AED0.75 with 24-carat gold inching up to AED298 while 22-carat gold rose to AED276. Meanwhile, 21-carat gold reached AED267.25 and 18-carat gold reached AED229.
Globally, spot gold lost 0.58 percent to $2,461.65, as of 5:07 GMT, after hitting its highest since August 2 earlier in the session. Meanwhile, U.S. gold futures fell 0.13 percent to $2,500.80.
Gold prices rose more than 1 percent in the previous session.
Softer inflation data to boost rate cut bets
Gold prices started the week strong but slightly eased due to some profit-taking, stated analysts. Prices will likely see additional support if a softer U.S. inflation report is released, which would raise hopes for a larger rate cut in September.
Currently, traders await the release of the July U.S. producer price data due today and the U.S. consumer price index data due on Wednesday for more insight into the size of the Fed’s rate cut.
Markets are now pricing in around a 50 percent chance of a 50 basis point rate cut in September, according to CME’s FedWatch Tool. Low interest rates traditionally boost the appeal of non-yielding assets like bullion.
Amid the extension of geopolitical tensions in the Middle East, analysts said that rising bets for a 50 basis point rate cut may support gold prices to a new record high.
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Other precious metals
As gold prices declined, the precious metals market witnessed varied movements. Spot silver lost 1.07 percent to $27.71 while platinum rose 0.13 percent to $937.70. Palladium, however, declined 0.31 percent to $917.01 while copper rose 0.39 percent to $4.07.
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