Gold prices dipped on Friday but were set for weekly gains after hitting a record high in the previous session on growing expectations of another outsized U.S. interest rate cut this year, while traders awaited a key inflation report for further direction.
In the UAE,ย gold rates held steady with a marginal AED0.25 rise in 22- and 18-carat gold varieties. Twenty-four-carat gold held steady at AED322.25 while 22-carat gold rose to AED299.50. Meanwhile, 21-carat gold remained at AED289.75 and 18-carat gold rose to AED248.50.
Globally, spot gold fell 0.34 percent to $2,663.47 as of 5:40 GMT, after hitting a record high of $2,682.88 in the previous session. Meanwhile, U.S. gold futures lost 0.35 percent to $2,685.40.
The dollar index recovered, gaining 0.34 percent to 100.86 and placing downward pressure on gold prices.
U.S. labor market signals recovery
Gold prices were gearing up for a weekly gain amid reports of declining U.S. weekly jobless claims which signaled a recovery in the country’s concerning labor market.ย Data on Thursday revealed that U.S. weekly jobless claims fell by 4,000 to a four-month low of 218,000.
The Federal Reserve delivered a 50-basis-point rate cut at its last policy meeting and traders now see a 51 percent chance of another half-percentage-point cut in November, according to the CME FedWatch Tool. Lower interest rates reduce the opportunity cost of holding non-yielding assets like gold, especially in light of economic and political turmoil.
Market focus now shifts to the core personal consumption expenditures price index data, the Fed’s preferred inflation gauge, due later in the day.
China’s gold imports tumble
Elsewhere, China’s net gold imports via Hong Kong declined by 76 percent to their lowest in more than two years in August, according to data on Thursday. On Friday, Chinaโs central bank also cut interest rates and infused liquidity into the banking system in a bid to boost economic growth towards the 5 percent target.
Read: Oil prices decline as Libya and OPEC+ boost output, while Chinaโs stimulus offers support
Other precious metals
The precious metals market witnessed a downward movement as gold prices retreated from their all time high. Spot silver declined 0.13 percent to $31.98 after hitting a near 12-year high of $32.71 in the previous session. Meanwhile, platinum fell 0.13 percent to $1,006 and palladium fell 0.99 percent to $1,037.25.
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