By: Economy Middle east

Gold prices rose by more than 3 percent on Wednesday, supported by a weakening U.S. dollar and a decline in oil prices that alleviated concerns regarding sustained inflation and higher global interest rates. This shift follows reports of a U.S. plan aimed at ending the Middle East conflict. Spot gold increased 3.58 percent to $4,558.61 per ounce, while U.S. gold futures for April delivery gained 3.48 percent to reach $4,588.50. The easing of the dollar made greenback-priced bullion more affordable for holders of other currencies, while other precious metals also saw gains; spot silver rose 5.71 percent to $73.31, platinum gained 1.8 percent to $1,969.64, and palladium increased 1.2 percent to $1,457.07.

Gold rates within the UAE saw an increase by 9:40 am Dubai time. The price of 24K gold fell AED8.25 to AED522.50, while 22K gold dropped AED7.75 to AED483.75. Additionally, 21K gold decreased AED7.25 to AED464.00, 18k gold declined AED6.25 to AED397.75, and 14k gold fell AED4.75 to AED310.25.

Oil falls below $100

Oil prices fell below $100 a barrel on prospects of a ceasefire, which helped ease inflationary fears. Lower crude prices typically reduce manufacturing and transport costs, which in turn diminishes the pressure on central banks to maintain high interest rates. While rising inflation often enhances the appeal of gold as a hedge, high interest rates generally weigh on demand for the non-yielding asset. Amidst these developments, U.S. President Donald Trump indicated progress in negotiations with Iran, mentioning a significant concession from Tehran. Consequently, investors have reduced their bets on Federal Reserve rate hikes by December to approximately 16 percent, down from 25 percent last Friday, according to the CME Group’s FedWatch tool.