Gold prices rose for the 3rd straight session this week on Thursday as investors awaited U.S. inflation data due later in the day for more insights into the Federal Reserve‘s interest rate trajectory.
In the UAE, gold prices saw an AED1.25 increase with 24-carat gold inching up to AED288.50 per gram, while 22-carat gold rose to AED267.25. Twenty-one-carat gold reached AED258.50 while 18-carat gold reached AED221.75.
Globally, spot gold gained 0.39 percent to $2,382.07, as of 5:15 GMT. Meanwhile, U.S. gold futures rose 0.31 percent to $2,387.15.
The dollar index declined 0.08 percent to 104.96, making greenback-priced bullion more attractive for other currency holders.
U.S. inflation data
Gold prices rose as investors awaited the June U.S. Consumer Price Index (CPI) report, due at 12:30 GMT, and the Producer Price Index (PPI) report on Friday. Markets expect the data to further raise hopes that the Federal Reserve will cut interest rates this year. Any surprise increase in the CPI report could weaken the dollar and push gold prices to the $2,400 level.
Fed governor Lisa Cook said on Wednesday that inflation should continue to fall without a significant further rise in the unemployment rate. Gold is considered a hedge against geopolitical tensions and lower interest rates raise the appeal of non-yielding assets.
Fed chair Jerome Powell also said on Wednesday that the central bank would make interest rate decisions “when and as” they were needed. On Tuesday, he told House members that “more good data” would build the case for an interest rate cut.
Traders are currently pricing in a 46 percent chance that the Fed will cut rates twice by the end of the year and a 73 percent chance for the first rate cut in September, according to CME’s FedWatch tool.
Read: Oil prices rise on weaker dollar, tighter supply bets ahead of CPI data
Other precious metals
In line with the rise in gold prices, spot silver rose 0.70 percent to $31.02 while palladium gained 0.66 percent to $992.85. Copper inched up 0.08 percent to $4.61 and platinum increased 0.14 percent to $990.91.
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