Gold prices in Dubai edged lower on Thursday as investors waited for fresh US inflation data for clues on the Federal Reserve’s interest-rate path. The 24K gold price fell to AED 531.25 per gram from AED 532 at the previous close. The 22K rate declined to AED 492 from AED 492.50.
Global gold prices continued to trade above USD 4,400 an ounce. Spot gold rose 0.22 per cent to USD 4,424.74 an ounce early Thursday, according to goldprice.org.
The weaker US dollar supported gold prices in global markets. Investors are now looking for fresh signals on the direction of US monetary policy.
Edward Meir, an analyst at Marex, said, “Geopolitical developments in the Arabian Gulf were, for now, of secondary importance to gold.”
Gold also gained support from concerns over US fiscal pressures. Daniel Hynes, senior commodities strategist at ANZ, said these concerns were weighing on confidence in US government debt and the dollar.
Investors are watching US producer-price data due on September 10. Consumer inflation figures are scheduled for September 11. A stronger inflation reading could influence expectations for the Federal Reserve’s interest-rate decisions. Higher rates tend to weigh on gold since the metal does not generate interest income.
The CME FedWatch Tool showed a 60% probability of a US rate increase this month, according to the report. Standard Chartered analysts highlighted that much of the rate-hike risk may already be reflected in gold prices. The bank expects the Federal Reserve to remain on hold this year.
Attention could then shift towards de-dollarisation, currency debasement and risks in the bond market. Developments around the Strait of Hormuz are also being watched by investors. Brent crude settled above USD 100 a barrel for the first time since late May.
Higher energy prices could add pressure to inflation expectations. That could further influence the outlook for US interest rates and gold prices in the sessions ahead.
Also Read: Dubai Gold Prices Today: 24K at AED 528, 22K at AED 489 Per Gram