Despite the rise in gold prices, the U.S. dollar’s recent ascent and rate-cut expectations have limited gains
Gold prices rose on Monday despite a firmer U.S. dollar as investors awaited additional hints regarding the Federal Reserve‘s interest rate cut trajectory.
In the UAE, gold rates rose AED0.25, with 24-carat gold rising to AED322 and 22-carat gold increasing to AED298.25. Meanwhile, 21-carat gold reached AED288.75 and 18-carat hit AED247.50.
Globally, spot gold gained 0.37 percent to $2,658.49 as of 5:44 GMT while U.S. gold futures dipped 0.05 percent to $2,674.95.
The U.S. dollar index rose 0.12 percent to 103.02, making bullion less attractive to other currency holders.
Stronger dollar limits gains
Despite the rise in gold prices, the U.S. dollar’s recent ascent and rate-cut expectations have limited gains. Traders now see an 86.8 percent chance of the Fed cutting rates by 25 basis points at its November meeting and a 13.2 percent chance it will leave rates unchanged.
Data on Friday revealed that U.S. producer prices last month remained unchanged. Amid economic and geopolitical turmoil, investors prefer non-yielding assets like gold.
This week, investors will look out for more comments from Fed officials for more insight into the upcoming rate cuts, along with U.S. retail sales data.
Analysts noted that if Fed officials signal uncertainty regarding the number of rate cuts this year, the U.S. dollar will surge further, impacting the rise in gold prices.
China to raise debt
Elsewhere, China said on Saturday that it would significantly increase debt to revive its faltering economy. However, it left investors guessing the overall size of the stimulus package. Recent data revealed that China’s consumer inflation unexpectedly eased in September while producer price deflation deepened.
Read: Oil prices decline amid disappointing Chinese economic signals, Middle East instability
Other precious metals
Amid the rise in gold prices, other metals witnessed declines. Spot silver fell 0.52 percent to $31.36 per ounce while platinum dipped 0.71 percent to $978, and palladium declined 0.73 percent to $1,060.92.
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