Gold prices rose on Friday but were on track for a weekly loss ahead of key U.S. inflation data, which could offer additional insight into when the Federal Reserve will cut interest rates.
In the UAE, gold prices remained stable after dipping by AED5.50 in the previous session with 24-carat gold at AED287, 22-carat gold at AED265.75, 21-carat gold at AED257.25, and 18-carat gold at AED220.50.
Globally, spot gold rose 0.23 percent to $2,369.46, as of 5:13 GMT. Meanwhile, U.S. gold futures gained 0.61 percent to $2,367.85.
September U.S. interest rate cut
Last week, gold prices rose to a record high of $2,482.29 on rising bets of a September U.S. interest rate cut. The market now awaits the U.S. June personal consumption expenditure data, the Federal Reserve’s preferred measure of inflation, due at 12:30 GMT for more insight into the central bank’s policy trajectory.
Data on Thursday revealed that the U.S. economy grew faster than expected in the second quarter, but inflation pressures eased, maintaining market expectations of a September rate cut. Lower interest rates reduce the opportunity cost of holding non-yielding assets like gold.
U.S. elections
The rising political uncertainty surrounding the U.S. elections and the U.S.-China trade tensions are other key triggers that could lead to a significant rebound in gold prices. China, the world’s top consumer, reported that net gold imports via Hong Kong declined 18 percent in June from the previous month.
Given the challenges in the property and equity markets, physical demand for gold should pick up in China. Meanwhile, India’s demand for gold is likely to rise moving into the 4th quarter when demand traditionally rises.
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Other precious metals
The precious metals market broadly mirrored the rise in gold prices with palladium rising 0.83 percent to $914.23 and platinum gaining 0.41 percent to $936.81. However, spot silver declined 0.82 percent to $27.74 while copper remained flat at $4.11.
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