Gold prices rose on Wednesday as investors awaited the release of the monthly U.S. payrolls report, which could provide additional insight into the job market’s health and Federal Reserve’s rate cut trajectory.
In the UAE, gold prices rose AED1 with 24-carat gold inching up to AED302.25 and 22-carat gold rising to AED279.75. Meanwhile, 21-carat gold reached AED270.75 and 18-carat gold hit AED232.25.
Globally, spot gold gained 0.12 percent to $2,495.94 as of 5:06 GMT. Meanwhile, U.S. gold futures inched up 0.16 percent to $2,527.10.
Job market data in focus
Gold prices rose as investors awaited the release of job openings data on Wednesday, the ADP employment and jobless claims report on Thursday, and the non-farm payrolls report on Friday. This data will provide the Fed with additional insight into the health of the U.S. job market and the urgency of cutting interest rates this month in case the market signals a slump.
Traders have priced in a 41 percent chance of a 50-basis-point rate cut during the Fed’s September 18 meeting and a 59 percent chance of a 25-basis-point rate reduction, according to the CME FedWatch Tool.
Analysts noted that if the jobs data was weak, this would raise the chance of a 50-basis-point rate cut and raise concerns over economic growth. Both of those factors will likely support gold prices.
Recent data revealed that the U.S. manufacturing sector contracted at a moderate pace in August with a slight improvement in employment.
Gold is traditionally a safe haven asset during times of political and economic uncertainty. Moreover, the appeal of the yellow metal tends to rise in a low-interest-rate environment.
So far this year, gold prices have gained over 29 percent, rising to a record high of $2,531.60 on August 20.
Read: Nasdaq Dubai lists $400 million bonds from Agricultural Bank of China
Other precious metals
As gold prices recovered, the precious metals market saw mixed movement on Wednesday. Spot silver dipped 0.03 percent to $28.04 while platinum gained 0.23 percent to $905.35. Palladium also recorded an increase of 0.35 percent to $941.62.
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