Gold prices declined on Friday and were set for a weekly drop as investors awaited additional hints regarding the size of the potential U.S. interest rate cut in September.
In the UAE, gold prices rose AED1 with 24-carat gold inching up to AED293.50 while 22-carat gold rose to AED271.75. Meanwhile, 21-carat gold reached AED263 and 18-carat gold reached AED225.50.
Globally, spot gold declined 0.10 percent to $2,422.48, as of 5:08 GMT. Meanwhile, U.S. gold futures fell 0.05 percent to $2,461.95.
Gold was on track for its biggest weekly fall since June 7 and fell as much as 3 percent on Monday as markets witnessed a broad selloff.
U.S. rate cut prospects
Gold prices were generally stable as investors recovered from the volatility during the beginning of the week. Several Federal Reserve officials said they are confident that cooling inflation will allow for future rate cuts, which will be guided by economic data rather than stock market fluctuations.
Gold prices currently find support in market volatility fears and Middle East tensions, both of which raise bullion’s safe haven investment status. In addition, expectations of a looser monetary policy will likely continue supporting prices to new record highs.
Markets are now pricing in a 55 percent chance of a 50-basis-points cut in September, according to the CME FedWatch Tool, with bets on an additional cut in December.
Data on Thursday revealed that U.S. jobless claims fell more than expected last week, signaling that markets may have overreacted to recession and labor market fears. Investors’ focus now shifts to the U.S. consumer price index (CPI) and producer price index (PPI) due next week for further insights into the Fed’s policy trajectory.
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Other precious metals
Despite the decline in gold prices, precious metal prices rose with spot silver rising 0.24 percent to $27.63 while platinum rose 0.60 percent to $936.59. Both metals were on track to record weekly declines. Palladium gained 0.51 percent to $927.34 and was up 4.4 percent this week while copper rose 0.53 percent to $3.97.
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