Gold prices ticked up on Thursday as traders awaited the release of key U.S. jobs and inflation data for insight into the Federal Reserve‘s policy path. A weaker dollar further supported the rise amid prospects of a U.S. interest rate cut in September.
In the UAE, gold prices rose AED0.5 with 24-carat gold inching up to AED304.50 and 22-carat gold rising to AED282. Meanwhile, 21-carat gold reached AED273 and 18-carat gold hit AED234.
Globally, spot gold gained 0.26 percent to $2,514.24 as of 5:10 GMT after hitting a record high of $2,531.60 on August 20. Meanwhile, U.S. gold futures were up 0.39 percent to $2,547.70.
The dollar index fell 0.14 percent to 100.95, making gold more attractive for other currency holders.
U.S. inflation data
Gold prices rose as markets awaited the release of the U.S. initial jobless claims data, due at 12:30 GMT, and the personal consumption expenditures (PCE) data, the Fed’s preferred inflation gauge, due on Friday. Economists expect the U.S. GDP growth number for Q2 to grow 2.8 percent, the headline PCE to rise to 2.6 percent in July, and the core PCE to rise to 2.7 percent.
Fed Bank of Atlanta President Raphael Bostic on Wednesday said that with inflation down further and the unemployment rate up more than he anticipated, it may be “time to move” on rate cuts. However, he said he wanted to be sure before pulling that trigger.
Traders have fully priced in a rate cut for next month, with a 65.5 percent chance of a 25-basis-point cut and a 34.5 percent chance of a bigger 50-basis-point reduction, according to the CME FedWatch tool.
Gold prices rose further as geopolitical tensions in the Middle East persisted. Bullion is considered a hedge against geopolitical and economic uncertainties and traditionally thrives in a low-interest-rate environment.
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Other precious metals
In line with the rise in gold prices, the precious metals market was positive on Thursday. Spot silver rose 1.22 percent to $29.47 while platinum gained 0.68 percent to $936.25. Palladium also recorded an increase of 0.59 percent to $951.77.
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