Gold prices saw an increase on Friday ahead of the release of the U.S. non-farm payrolls data for May, which could provide more insights into the Federal Reserve’s next interest rate cut.
In the UAE, gold prices gained close to AED2 with 24-carat gold rising to AED288.75 per gram, while 22-carat gold increased to AED267.50. Twenty-one-carat gold inched up to AED259.00, while 18-carat gold reached AED222.00.
Globally, spot gold saw a 0.18 percent increase to $2,380.23 per ounce, as of 5:43 GMT. Gold prices have gained 1.29 percent in the last 30 days, Meanwhile, U.S. gold futures saw a 0.32 percent increase to $2,398.65.
The dollar index saw a 0.01 percent increase but hovered close to an eight-week low while benchmark U.S. 10-year Treasury yields declined to their worst week since December 2023, making gold more attractive for investors.
Interest rate cuts boost bullion’s appeal
Recent interest rate cuts by the European Central Bank (ECB), which announced its first interest rate cut since 2019 on Thursday, provided further support to gold prices. In addition to the ECB’s cut, the Bank of Canada cut interest rates for the first time in four years.
The recent shift in Europe and Canada’s key policy rate has bolstered expectations of an interest rate cut by the U.S. Federal Reserve soon. Lower interest rates reduce the opportunity cost of holding non-yielding bullion, further supporting gold demand and prices. Traders are currently pricing in about a 68 percent chance of a rate cut in September, according to the CME FedWatch tool.
Investors now await the non-farm payrolls data due at 12:30 GMT for more insights into the U.S. economy’s health and potential Fed rate cut in September.
Read: Oil prices set for third weekly decline on prospects of OPEC+ easing output cuts
Other precious metals
Despite the rise in gold prices, the precious metals market showed mixed movement with spot silver gaining 0.30 percent to $31.39. Meanwhile, spot platinum rose 0.56 percent to $1,008.35, breaking the $1,000 mark. However, spot palladium declined 0.44 percent to $925.78.
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