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UAE gold prices rise, global rates eye second consecutive weekly rise

Gold prices rose on Friday and were set for a second consecutive weekly gain as traders awaited U.S. employment data for more insight into the trajectory of the Federal Reserve’s potential interest rate cuts.

In the UAE, gold prices saw an AED0.75 increase with 24-carat gold inching up to AED286.25 per gram, while 22-carat gold rose to AED265. Twenty-one-carat gold was at AED256.50 while 18-carat gold reached AED220.

Globally, spot gold saw a 0.30 percent increase to $2,363.49 per ounce, as of 5:07 GMT. Meanwhile, U.S. gold futures gained 0.27 percent to $2,371.70.

The dollar index declined 0.13 percent to 105, making greenback-priced bullion cheaper for other currency holders.

U.S. economic data boosts bullion
Gold prices recovered this week from weaker U.S. economic data. Data on Wednesday, including weak services and ADP employment reports, signaled a slowdown in the economy. Another report also revealed an increase in initial applications for U.S. unemployment benefits last week.

The market now awaits the U.S. non-farm payrolls report due at 12:30 GMT for additional insight into the U.S. economy’s health. Analysts believe that if the non-farm payrolls data declines, investors will raise their expectations of a September Fed interest rate cut. This could push gold prices above the $2,400 level.

Gold prices have so far held steady above the $2,300 mark, which signals that they will likely rise further in a lower interest rate environment. Traders are currently pricing in a 73 percent chance of an interest rate cut in September, according to CME FedWatch Tool. Lower interest rates reduce the opportunity cost of holding non-yielding gold.

Other precious metals
In line with the rise in gold prices, spot silver gained 0.43 percent to $30.53 while palladium rose 0.32 percent to $1,020.75. Copper rose 0.65 percent to $4.57. However, platinum declined by 0.13 percent to $1,001.10.

Source:https://economymiddleeast.com/news/uae-gold-prices-rise-global-rates-eye-second-consecutive-weekly-rise/