Traders are awaiting comments from Fed Chairman Powell on Thursday and U.S. inflation data on Friday for further policy clues.
Gold prices hit fresh record highs on Wednesday as the US dollar weakened on optimism about lower US interest rates and markets awaited economic data that would provide further clues about the trajectory of the US economy.
In the UAE, gold prices increased by AED3.75, with 24-karat gold rising to AED322 and 22-karat gold rising to AED298, while 21-karat gold was at AED288.50 and 18-karat gold was at AED247.25.
Globally, spot gold prices rose 0.04% to $2,659.19 at 5:30 GMT after hitting a new record high of $2,670.15 early in trading. Over the past six months, gold prices have risen nearly 22%. Meanwhile, U.S. gold futures rose 0.21% to $2,682.60.
The dollar index fell 0.21% to 100.26, making gold cheaper for holders of other currencies.
Prospects of rate cuts continue to support gold
Gold prices hit new highs following China’s decision to announce new support measures, including a significant interest rate cut. A cut in Chinese interest rates is likely to further support gold demand in the world’s largest consumer of the precious metal. Thus, in a low interest rate environment, non-yielding assets tend to become more attractive.
Last week, the Federal Reserve cut interest rates by 50 basis points, sending gold prices soaring to all-time highs, and the market now rates the likelihood of another 50 basis point cut at 60.2%, according to CME FedWatch.
Traders are now awaiting comments from Fed Chairman Jerome Powell on Thursday and U.S. inflation data on Friday for further policy clues.
Meanwhile, geopolitical tensions continued in the Middle East, raising fears of an all-out regional war, further driving up gold prices as the metal is a hedge against economic and political uncertainty.
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Other precious metals
Precious metals markets were mixed as gold prices surged to an all-time high, with spot silver down 0.70% to $31.91 and platinum up 0.07% to $986.45, while palladium was down 0.70% to $1,049.00.
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