By: Economy Middle east

Gold and silver prices fell further on Friday as better-than-expected U.S. economic data reduced bets on an early interest rate cut by the Federal Reserve, while easing geopolitical tensions also weighed on safe-haven demand.

In the UAE, gold rates also eased further, with 24-carat gold losing AED1.75 to AED554.25 and 22-carat gold declining AED1.5 to AED513.25. Additionally, 21-carat gold eased AED1.5 to reach AED492.25, while 18-carat gold edged down AED1.5 to AED421.75.

Meanwhile, 14-carat gold fell AED1 to AED329.

Globally, Spot gold slipped 0.40 percent to $4,601.08 an ounce by 5:27 GMT. Despite the pullback, the metal was still on track for a weekly gain of roughly 2 percent, after hitting a record high of $4,642.72 on Wednesday. Meanwhile, U.S. gold futures for February delivery fell 0.47 percent to $4,601.90.

Silver also declined, falling 2.09 percent to $90.48.

Fed funds futures push back expectations for the next rate cut to June

“On Wednesday, investors saw new highs in gold, which climbed to $4,656 before retreating. Gold and Silver are in a structural bullish phase due to market volatility and geopolitics,” said Vijay Valecha, Chief Investment Officer, Century Financial.

The recent pullback in gold prices began as markets pared back expectations of a U.S. intervention in Iran’s social unrest, while incoming U.S. economic data suggested there was no immediate urgency for the Federal Reserve to cut interest rates.

Fed funds futures have pushed back expectations for the next rate cut to June, reflecting a robust labor market and policymakers’ concerns over persistent inflation.

In addition, the dollar was on track for a third consecutive weekly gain after U.S. Labor Department data showed initial jobless claims fell by 9,000 to a seasonally adjusted 198,000 last week, well below the expected 215,000.

A stronger dollar makes greenback-denominated metals more expensive for holders of other currencies, while lower interest-rate environments typically support non-yielding assets such as gold.

“The recent dollar strength is more a result of economic fundamentals rather than views of Fed policy. U.S. fundamentals continue to hold up, with stronger-than-expected November retail sales and higher producer prices reflecting sound U.S. demand and core inflation patterns consistent with the market’s revision of Fed rate cuts later, rather than March,” he added/

Gold prices fall as Trump delays action on Iran

Protests in Iran appeared to have eased since Monday, while U.S. President Donald Trump also adopted a softer tone on the prospect of military intervention, further limiting the gains gold prices made at the beginning of the week.

Safe-haven gold also weakened as risk sentiment improved following President Trump’s remarks that he has no plans to remove Fed Chair Jerome Powell, despite reports of potential Justice Department investigations. Trump also suggested he may delay action on Iran while advancing trade measures affecting critical minerals and AI chips.

“As geopolitical risks increase, investors typically move into safe-haven assets like gold. Key concerns include intensifying protests in Iran and growing tensions between the US and EU over Greenland, with the U.S. sharpening its rhetoric. Moreover, the White House said that President Trump signed an order to protect the US supply of rare earths, contributing to the momentum,” Valecha added.

“Lastly, concerns over the Fed’s independence remain a key concern. Central bank chiefs across the globe voiced support for the Fed Chair after Trump threatened to indict him,” he said.

Other precious metals

As gold prices declined, silver remained on track for a weekly gain of more than 13 percent after reaching a record high of $93.57 in the previous session. Spot platinum declined 2.8 percent to $2,342.14 an ounce, while palladium dropped 2.3 percent to $1,759.07 an ounce, following an earlier one-week low.