Gold prices saw an increase on Wednesday after falling to a three-week low of $2,315 in the previous session as investor attention turns to key U.S. employment data due today, which could influence the Federal Reserve‘s interest rate trajectory.
In the UAE, gold prices gained around AED1.25 with 24-carat gold rising to AED283.25 per gram, while 22-carat gold increased to AED262.25. Twenty-one-carat gold inched up to AED253.75, while 18-carat gold reached AED217.50.
Globally, spot gold saw a 0.57 percent increase to $2,340.29 per ounce, as of 5:22 GMT. Meanwhile, U.S. gold futures saw a 0.53 percent increase to $2,359.80.
U.S. employment data
Gold prices lost close to 1 percent in the previous session despite rising earlier in the week due to weaker U.S. manufacturing data. ISM data recently revealed that the manufacturing PMI index dropped from 49.2 in April to 48.7 in May. In addition, job openings, a measure of labor demand, declined by 296,000 to 8.059 million during the last day of April, the lowest level since February 2021, the U.S. Department of Labor’s Bureau of Labor Statistics (BLS) revealed on Tuesday in its JOLTS survey. The decline in the U.S. manufacturing PMI index and job openings has raised concern over the U.S. economy’s health, spurring safe-haven demand for gold, thus supporting its prices.
Investors now await the release of the ADP employment report today and the ISM services PMI data for fresh cues on the Fed’s interest rate outlook, which has a significant impact on the demand and prices of non-yielding assets like gold. Investors also await the non-farm payrolls data due on Friday.
Markets are currently pricing in about a 56 percent chance of a rate cut in September, according to CME Group’s FedWatch tool. Investors now expect further support for gold prices if the U.S. ADP employment report and ISM Services PMI data reveal slower growth.
Read: Oil prices drop to 4-month low amid outsized increase in U.S. inventories
Other precious metals
In line with the recovery in gold prices, the precious metals market saw upward movement on Wednesday with spot silver rising 0.73 percent to $29.70. Meanwhile, spot platinum rose 0.13 percent to $988.42 and spot palladium rose 1.12 percent to $925.63.
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