Gold prices saw a slight increase on Thursday, bolstered by a retreat in the U.S. dollar. Investors are keenly awaiting the U.S. nonfarm payrolls data set to be released on Friday to evaluate the Federal Reserve‘s interest rate path, particularly amid escalating global trade tensions.
In the UAE, gold rates saw a slight increase of AED0.25 today. The price for 24-carat gold is now AED351.5, while 22-carat gold remains steady at AED327. Additionally, 21-carat gold rose by AED0.25 to AED313.75, and 18-carat gold is priced at AED268.75.
Spot gold rose 0.1 percent to $2,921.19 an ounce by 0625 GMT, while U.S. gold futures also increased by 0.1 percent to $2,929.30. The dollar index remained near a four-month low as the U.S. granted automakers a one-month exemption from the 25 percent tariffs on Canada and Mexico, provided they adhere to existing free trade regulations.
U.S. President Donald Trump has expressed a willingness to consider additional products for tariff exemptions, according to the White House. Trump’s tariffs have created strains in relations with Canada, Mexico, and China. In response, both Canada and China have implemented their own tariffs on selected U.S. imports, while Mexico has pledged to retaliate. Concerns over Trump’s tariff strategies have propelled safe-haven gold to a record high of $2,956.15 on February 24, contributing to an over 11 percent increase year-to-date. Gold remains a favored hedge against political uncertainties and inflation.
Employment data shows mixed signals
Data released by ADP Research indicated that the U.S. private sector added 77,000 jobs in February, following the creation of 186,000 jobs in January. This figure fell significantly short of the anticipated 140,000. However, the Institute for Supply Management (ISM) Services PMI increased to 53.5 in February, surpassing forecasts of 52.6. Meanwhile, the ISM Services Employment Index rose to 53.9 in February from 52.3 in January.
Read more: UAE gold prices dip AED1.25, global rates rise amid Trump tariffs
Euro strengthens amid political developments
The Euro (EUR) surged to a four-month high against the U.S. dollar (USD), in line with the rise in German bund yields after political parties in Germany reached an agreement on a substantial spending plan aimed at bolstering the Eurozone’s largest economy. The increase in German bund yields has driven global yields upward, including U.S. Treasury bond yields, which could limit the recovery of the gold price.
Market anticipates key payrolls report
The market is now focusing on the upcoming non-farm payrolls report, which is expected to reflect a gain of 160,000 jobs for February. Spot silver decreased by 0.1 percent to $32.6 an ounce, platinum remained stable at $965.6, and palladium rose by 0.2 percent to $944.00.
In the interim, the mid-tier U.S. Jobless Claims data and any further developments regarding tariffs from the Trump administration will be closely monitored for their potential impact on the USD’s performance and gold price movement. The forthcoming European Central Bank (ECB) policy decision could dampen the EUR/USD rally and trigger a rebound in the U.S. dollar. Should this occur, a corrective move lower in gold price could follow, interpreted as a profit-taking decline ahead of the crucial U.S. payrolls data on Friday.
