Gold prices rose on Wednesday as investors awaited the release of key U.S. economic data for a better picture of the Federal Reserve‘s interest rate cut trajectory.
In the UAE, gold prices gained AED1.5 with 24-carat gold rising to AED292.75 per gram, while 22-carat gold inched up to AED271.25. Twenty-one-carat gold reached AED262.50 while 18-carat gold reached AED225.
Globally, spot gold gained 0.34 percent to $2,416.82, as of 5:11 GMT. Meanwhile, U.S. gold futures rose 0.42 percent to $2,417.50.
U.S. economic data
Gold prices rose as investors awaited the release of the second-quarter gross domestic product (GDP) reading on Thursday and the June personal consumption expenditures (PCE) price index data on Friday, which will provide additional clues on the timing of the next rate cut.
Analysts said that any increase in the data sets may impact gold prices and the dollar index in the short term. However, gold’s outlook remains positive as the Fed inches closer to a rate cut decision.
Markets now expect the U.S. central bank to cut rates twice this year, in September and December, as resilient U.S. consumer demand has raised concern despite inflation easing.
Gold prices rose to an all-time high of $2,483.60 last week amid rising expectations of interest rate cuts this year. Lower interest rates reduce the opportunity cost of holding non-yielding assets like gold.
India slashes gold and silver import duties
India slashed import duties on gold and silver from 15 percent to 6 percent on Tuesday in an effort to raise retail demand and reduce smuggling in the world’s second-biggest bullion consumer. Greater demand for gold in India could boost global prices. However, that could widen India’s trade deficit and put pressure on its weak rupee.
Read: Five key ideas for investors in the Middle East
Other precious metals
The precious metals market was mixed as gold prices rose. Spot silver rose 0.11 percent to $29.25. Meanwhile, palladium lost 0.42 percent to $921.95 while copper declined 0.31 percent to $4.13. Platinum, however, gained 0.27 percent to $945.90.
In a recent report, Sprott Asset Management said that photovoltaic panel usage forecasts have risen, raising the demand for silver above the current supply.
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