Gold prices experienced a modest uptick on Thursday, building upon a significant surge in the previous session. This movement also came against a backdrop of a weakening dollar and declining bond yields, spurred by expectations of interest rate cuts by the U.S. Federal Reserve as early as September.
In the UAE, gold prices surged over AED4, with 24-carat gold increasing to AED289.50 per gram, while 22-carat gold rose to AED268.25. Twenty-one-carat gold increased to AED259.50, while 18-carat gold rose to AED222.50.
Globally, spot gold saw a 0.25 percent increase to $2,391.88 per ounce, as of 5:17 GMT, after rising over 1 percent to its highest since April 19 on Wednesday. Meanwhile, U.S. gold futures saw a 0.07 percent rise to $2,396.55.
Cooling inflation supports gold prices
Expectations of an interest rate cut in September led to a 0.2 percent decline in the dollar, making greenback-priced bullion less expensive for other currency holders. Moreover, the benchmark 10-year Treasury yield declined to its lowest in over a month.
U.S. consumer prices increased less than expected in April, suggesting that inflation resumed its downward trend. This has raised expectations of an interest rate cut soon, which supports gold prices. However, a recovery in the dollar and Treasury yields could impact the rise of gold prices this week.
Declining inflation, softer U.S. payrolls and a lackluster jobs report in April signal a recovering economy for policymakers and the Fed. The central bank now awaits continuous progress on inflation before cutting rates.
Read: Oil prices rise amid weaker dollar, tighter supply expectations
Other precious metals
While gold prices remain a primary focus, other precious metals experienced varied movements. Spot silver saw a decline of 0.31 percent, reaching $29.61 per ounce, while palladium saw a 0.08 percent decline to $1,008.87. Notably, platinum exhibited a more substantial increase of 0.7 percent, reaching $1,071.25, marking its highest level since May 22, 2023.
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