Gold prices edged up on Thursday as investors awaited the release of additional U.S. economic data for more insight into the trajectory of interest rate cuts during the Federal Reserve‘s meeting next week.
In the UAE, gold prices rose AED0.75 with 24-carat gold rising to AED304.75 and 22-carat gold inching up to AED282.25. Meanwhile, 21-carat gold reached AED273.25 and 18-carat gold was at AED234.25.
Globally, spot gold edged up 0.20 percent to $2,517.34 as of 5:08 GMT, while U.S. gold futures rose 0.11 percent to $2,545.20.
U.S. inflation rises marginally
Analysts noted that gold prices will likely continue to increase unless U.S. economic data shows signs of macroeconomic strength and growth, which may impact the upward trend.
Data on Wednesday revealed that U.S. consumer prices rose marginally in August. However, underlying inflation showed some stickiness, which could discourage the Fed from delivering a half-point interest rate cut next week.
Traders’ focus now shifts to the U.S. producer price index (PPI) and initial jobless claims data, scheduled for release at 12:30 GMT, in addition to consumer sentiment data on Friday. Headline PPI month-over-month is expected to reach 0.1 percent, while the year-over-year rise is expected to hit 1.8 percent compared to last month’s 0.1 percent and 2.2 percent, respectively.
The U.S. central bank will likely start cutting interest rates next week with traders raising bets for a 25-basis-point cut to 87 percent and reducing their bets for a 50-basis-point cut to 13 percent, according to the CME Fedwatch Tool. Lower interest rates traditionally boost gold’s appeal, thus, supporting prices.
The rate cut would reduce the chance of an economic recession despite challenges in reducing underlying price pressures.
Read: UAE gold prices rise, global rates near $2,520 ahead of U.S. CPI data
Other precious metals
The precious metals market saw positive movement amid the rise in gold prices with spot silver gaining 0.12 percent to $28.72 and platinum rising 0.51 percent to $956.11. In addition, palladium inched up 0.80 percent to $1,016.40.
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