Gold prices rose marginally on Monday as investors awaited the release of U.S. inflation data this week, which will give additional insight into the size of the interest rate cut by the Federal Reserve this month.
In the UAE, gold prices remained flat with 24-carat gold at AED302.50 and 22-carat gold at AED280. Meanwhile, 21-carat gold reached AED271 and 18-carat gold was at AED232.25.
Globally, spot gold rose 0.04 percent to $2,497.58 as of 5:10 GMT. Meanwhile, U.S. gold futures gained 0.06 percent to $2,526.
U.S. inflation data
Gold prices rose as the market awaited the release of the August U.S. Consumer Price Index (CPI) due on Wednesday, followed by the Producer Price Index (PPI) on Thursday.
Traders are now pricing a 69 percent chance of a 25-basis-point cut at the Fed’s September 17-18 meeting, and a 31 percent chance of a 50-basis-point cut, according to the CME FedWatch Tool. A low interest rate environment tends to boost non-yielding bullion’s appeal.
Data on Friday revealed that U.S. employment increased less than expected in August, which supported a rebound in gold prices. However, a decline in the jobless rate to 4.2 percent signaled that the labor market was not easing to the extent of needing a half-point rate cut.
In addition, softer-than-expected inflation data in China raised demand concerns in the world’s top consumer. This fuelled speculations that Chinese authorities could roll out more stimulus measures to boost the economy, further supporting gold prices. China’s inflation rate grew 0.6 percent in August.
Read: Bank of Sharjah prices $500 million bond, attracts orders worth $1.4 billion
Other precious metals
As gold prices rose, the precious metals market saw positive movement. Spot silver rose 0.38 percent to $28.03 while platinum gained 1.30 percent to $933.55. In addition, palladium inched up 0.96 percent to $919.37.
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