Gold prices inched up on Tuesday as comments from Federal Reserve Chair Jerome Powell raised bets for a September interest rate cut while investors awaited additional economic data to further gauge the possibility of a monetary policy change.
In the UAE, gold prices rose AED2 with 24-carat gold inching up to AED294 per gram, while 22-carat gold rose to AED272.25. Twenty-one-carat gold reached AED263.50 while 18-carat gold reached AED226.00.
Globally, spot gold rose 0.25 percent to $2,428.57, as of 5:12 GMT. Meanwhile, U.S. gold futures increased 0.19 percent to $2,433.55.
U.S. rate cut optimism bolsters bullion
Gold prices rose after Powell delivered his comments on Monday, leading markets to fully price in a September rate cut. Powell stated yesterday that the three U.S. inflation readings over the second quarter of this year added confidence that the pace of inflation is returning to the central bank’s target of 2 percent in a sustainable manner.
Lower interest rates tend to reduce the opportunity cost of holding non-yielding assets like gold.
Investors now await the U.S. retail sales data due today at 12:30 GMT and comments from Fed governors Christopher Waller and Adriana Kugler later this week for further direction on the next policy move.
Slower retail sales will likely support gold prices amid the Fed’s rate cut supportive stance. Meanwhile, analysts believe that if gold prices hit a record high soon, they may continue their upward trend to the $2,600 level.
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Other precious metals
Amid the rise in gold prices, India’s four-week platinum imports from mid-June surpassed 2023’s total as gold dealers exploited a loophole by registering alloys containing around 90 percent gold as platinum to avoid higher duties.
Moreover, spot silver declined 0.91 percent to $30.73 while palladium rose 0.40 percent to $954.09. Copper declined 0.43 percent to $4.51 while platinum lost 0.31 percent to $991.88.
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