By Yara Abi Farraj

UAE gold prices rise, global rates set for third quarterly gain ahead of U.S. inflation data

Investors today await the U.S. personal consumption expenditures (PCE) price index, the Fed's preferred inflation measure

A recent World Gold Council survey expected central banks to raise their gold reserves in the next 12 months

Gold prices declined on Friday but were set to record their third consecutive quarterly gain as traders awaited key U.S. inflation data for more insight into the Federal Reserve‘s interest rate cut timing.

In the UAE, gold prices saw an AED2.25 increase with 24-carat gold rising to AED281 per gram, while 22-carat gold inched up to AED260.25 Twenty-one-carat gold rose to AED252 while 18-carat gold reached AED216.

Globally, spot gold saw a 0.24 percent decline to $2,321.95 per ounce, as of 5:12 GMT, gaining over 4 percent in the second quarter. Meanwhile, U.S. gold futures lost 0.17 percent to $2,332.55.

China central bank buying boosts bullion

Gold prices recorded a third quarterly increase due to two primary factors, including the U.S. monetary policy’s trajectory and China’s central bank buying of gold for its reserves.

After raising its gold reserves for 18 months straight, official data from the People’s Bank of China (PBOC) revealed that it halted buying gold in May. Meanwhile, a recent World Gold Council survey expected central banks to raise their gold reserves in the next 12 months.

Gold prices rose more than 1 percent in the previous session after U.S. gross domestic product (GDP) data revealed a moderate slowdown in economic activity in the first quarter. Currently, the market is pricing in a 64 percent chance of an interest rate cut in September, according to the CME FedWatch tool.

Investors today await the U.S. personal consumption expenditures (PCE) price index, the Federal Reserve’s preferred inflation measure, due at 12:30 GMT. A softer PCE will raise hopes for an interest rate cut soon and further support gold prices. While gold is traditionally an inflation hedge, higher rates increase the opportunity cost of holding the non-yielding asset.

Read: Half of all emerging-market debt issued by GCC countries, Malaysia, Indonesia, and Türkiye: Report

Other precious metals

Despite the decline in gold prices, the metals market saw mixed movement. Spot silver was down 0.17 percent to $29.01. Meanwhile, platinum gained 0.93 percent to $996.65 while palladium rose 1.15 percent to $940.07.

For more news on markets, click here.