Markets are currently pricing in a 93 percent chance of an interest rate cut in September, according to the CME Fedwatch Tool.
Gold prices rose on Monday despite the dollar index rising as investors awaited comments from Federal Reserve officials and additional economic data for more insight into the U.S. interest rate trajectory.
In the UAE, gold prices remained stable with 24-carat gold recording AED292 per gram, while 22-carat gold reached AED270.50. Twenty-one-carat gold reached AED261.75 while 18-carat gold reached AED224.25.
Globally, spot gold rose 0.09 percent to $2,410.86, as of 5:07 GMT. Meanwhile, U.S. gold futures declined 0.21 percent to $2,415.50.
The dollar index rose 0.11 percent to 104.21.
Traders Await Fed’s Comments
Gold prices rose as markets awaited Federal Reserve chair Jerome Powell, who is due to speak later today, and a few other officials later during the week. Investors also awaited additional U.S. economic data this week, including U.S. retail sales, industrial output for June, and weekly jobless claims.
Analysts believe that if retail sales signal a decline, the Fed would sense an urgency to cut interest rates, which would support gold prices.
Markets are currently pricing in a 93 percent chance of an interest rate cut in September, according to the CME Fedwatch Tool. Lower interest rates reduce the opportunity cost of holding non-yielding assets like gold.
The dollar index rose after the attempted assassination of former U.S. president Donald Trump. A stronger dollar makes gold prices more expensive for buyers holding other currencies.
Other Precious Metals
The economy of key metals consumer, China, slowed in the second quarter of 2024, raising expectations that Beijing will need to release more stimulus.
Amid the rise in gold prices, spot silver rose 0.50 percent to $30.92 while palladium declined 0.97 percent to $959.67. Copper declined 0.08 percent to $4.59 while platinum lost 0.68 percent to $991.64.
Fed Chair Powell Says Holding Rates High For Too Long Could Jeopardize Economic Growth
