Gold prices saw a slight decline on Tuesday but held steady near their record high as the market awaited the U.S. Federal Reserve meeting minutes and Chair Jerome Powell’s speech for additional insight into the size of the central bank’s interest rate cuts this year.
In the UAE, gold prices remained stable with 24-carat gold at AED302.75 and 22-carat gold at AED280.25. Meanwhile, 21-carat gold held steady at AED271.50 and 18-carat gold was AED232.75.
Globally, spot gold declined 0.03 percent to $2,502.8, as of 5:15 GMT, after hitting an all-time high of $2,509.65 last week. Meanwhile, U.S. gold futures inched down 0.04 percent to $2,540.35.
Fed rate cut decision nears
Gold prices have gained over 20 percent so far this year due to several factors including optimism that the U.S. central bank will begin cutting interest rates in September, robust central bank buying, and safe-haven demand due to geopolitical tensions in the Middle East. Lower interest rates tend to raise the appeal of non-yielding assets like bullion.
Analysts say that the trend for gold remains positive where prices could rise to the $2,665 level from a technical perspective.
The market now expects the Fed to cut rates by 25 basis points during each of the three remaining meetings this year. Traders will now closely monitor the minutes of the Fed’s July policy meeting due on Wednesday and Chair Jerome Powell’s speech at the Jackson Hole symposium on Friday for additional cues.
In addition, the U.S. dollar index fell to a seven-month low in the previous session, further supporting dollar-denominated gold prices.
SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, saw a jump in holdings to their highest in seven months at 859 tons on Monday.
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Other precious metals
Amid the decline in gold prices from their record high, the precious metals market witnessed mixed movement. Spot silver declined 0.44 percent to $29.35 while platinum gained 0.29 percent to $956.29. Palladium lost 0.93 percent to $923.18 while copper rose 0.20 percent to $4.18.
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