Gold prices rose on Wednesday and were set for a monthly gain as optimism surrounding U.S. interest rate cuts rises and focus shifts to the Federal Reserve‘s policy decision later in the day.
In the UAE, gold prices surged by AED3.75 with 24-carat gold rising to AED293 while 22-carat gold increased to AED271.50. Meanwhile, 21-carat gold reached AED262.75 and 18-carat gold reached AED225.25.
Globally, spot gold rose 0.41 percent to $2,419.3, as of 5:09 GMT, and has gained 3.39 percent so far this month. Meanwhile, U.S. gold futures gained 0.50 percent to $2,464.25.
Fed’s policy decision
The Fed’s two-day meeting concludes later today with expectations that the central bank will hold interest rates steady and policymakers will start preparing for a September rate cut. If the Fed signals the possibility of multiple rate cuts this year, gold prices will likely rally.
The U.S. market has fully priced in a 25-basis-point cut in September. Lower interest rates reduce the opportunity cost of holding non-yielding assets like gold.
Traders are also awaiting the ADP employment report due later in the day and Friday’s U.S. payrolls report. Data on Tuesday showed that U.S. job openings had dropped 46,000 to 8.184 million by the last day of June.
In addition, regional tensions in several countries across the Middle East are on the rise. This will likely spark safe-haven demand for gold if there is a significant escalation in tensions, further supporting the precious metal’s prices.
Read: Global gold demand hits record highs with strongest Q2
Other precious metals
The precious metals market is seeing positive movement as gold prices rise further. Spot silver rose 0.53 percent to $28.54 while platinum rose 1 percent to $968.88. In addition, palladium surged 1.31 percent to $900.50 while copper gained 0.22 percent to $4.07.
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