Gold prices eased on Tuesday due to a stronger dollar while traders awaited the release of key U.S. inflation data which could hint to the size of the Federal Reserve‘s interest rate cut next week.
In the UAE, gold prices rose AED0.5 with 24-carat gold rising to AED303 and 22-carat gold inching up to AED280.50. Meanwhile, 21-carat gold reached AED271.50 and 18-carat gold was at AED232.75.
Globally, spot gold edged down 0.22 percent to $2,501.38 as of 5:07 GMT. Meanwhile, U.S. gold futures fell 0.10 percent to $2,530.05.
The U.S. dollar index hit a one-week high, making gold more expensive for other currency holders.
U.S. inflation dataÂ
Gold prices declined as market focus shifted to the U.S. consumer price index (CPI) data on Wednesday and the producer price index (PPI) figures on Thursday.
Traders expect the inflation data to reflect further disinflation which will support a rate cut by the Fed. If the data comes as expected, gold prices should remain well-supported above the $2,500 level. Analysts expected gold prices to reach over $2,660 in the next few months.
The Fed’s stance on a rate cut has been clear ahead of next week’s meeting. Traders are currently pricing in a 70 percent chance of a 25-basis-point cut and a 30 percent chance of a 50-basis-point cut, according to the CME FedWatch Tool.
The latest New York Federal Reserve report revealed that the U.S. public’s expectations for inflation remained stable last month, even as current price pressures continued to ease.
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Other precious metals
As gold prices declined, the precious metals market saw mixed movements on Tuesday. Spot silver declined 0.32 percent to $28.26 while platinum gained 0.21 percent to $939.83. In addition, palladium inched up 0.40 percent to $950.39.
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