By: Economy Middle east

Gold prices edged higher in subdued trading on Thursday, building on gains of more than 2 percent in the previous session, as investors awaited crucial U.S. inflation figures that could shape the Federal Reserve’s next moves on interest rates.

As of 5:59 GMT, spot gold rose 0.19 percent to $4,997.47 an ounce, while U.S. gold futures for April delivery advanced 0.10 percent to $5,014.10 per ounce. Meanwhile, spot silver gained 0.44 percent to $77.96.

In the UAE, gold rates posted marginal increases, with 24-carat gold gaining AED0.25 to AED600.75 and 22-carat gold holding steady at AED556.25. Additionally, 21-carat gold and 18-carat gold edged up AED0.25 to AED533.5 and AED457.25, respectively.

Meanwhile, 14-carat gold increased AED0.25 to AED356.75.

Lunar New Year amplifies price moves amid thin trading

“Gold, silver and copper have started the Lunar New Year week under pressure, with much of Asia — and crucially China — closed. The subdued trading environment has amplified price moves while underscoring how heavily the recent rally relied on Asian participation,” said Ole Hansen, Head of Commodity Strategy, Saxo Bank.

Gold prices remained under pressure as markets in mainland China, Hong Kong, Singapore, Taiwan and South Korea were closed for the Lunar New Year holidays, leading to thinner regional trading volumes. At the same time, the U.S. dollar hovered near a more than one-week peak, making gold that is priced in the greenback more expensive for holders of other currencies.

“Despite short-term softness, the structural drivers supporting gold remain firmly in place in our opinion. Persistent central bank reserve diversification continues to underpin structural buying, while expanding fiscal deficits and elevated sovereign debt levels reinforce gold’s role as a store of value amid currency debasement concerns,” added Hansen.

Market awaits PCE report

Minutes from the Federal Reserve’s January meeting showed policymakers were almost unanimously in favor of keeping rates unchanged, though opinions diverged on the next move. Several officials signaled they would consider further rate hikes if inflation remains sticky, while others indicated a willingness to back additional cuts should price pressures ease.

According to CME’s FedWatch Tool, markets are currently pricing in June as the most likely timing for the first rate cut this year.

Investors are now turning their attention to weekly jobless claims data due later on Thursday, as well as Friday’s Personal Consumption Expenditures (PCE) report, the Federal Reserve’s preferred gauge of inflation. Gold prices, which do not offer a yield, typically perform better in a low-interest-rate environment.

“At the same time, ongoing geopolitical fragmentation sustains long-term demand even when not immediately reflected in price, and continued portfolio diversification away from dollar-centric assets supports strategic allocations. Together, these forces suggest that, although corrections are inevitable after parabolic advances, the broader bull trend remains intact,” added Hansen.

Other precious metals

As gold and silver prices rose, the broader precious metals market witnessed mixed movement. Spot platinum gained 0.16 percent to $2,074.38, while palladium dipped 0.41 percent to $1,708.5.

Hansen explained that silver’s long-term fundamentals remain supportive, particularly given its dual role in monetary demand and solar photovoltaic expansion.

“For 2026, the Silver Institute forecasts a sixth consecutive annual structural deficit of around 67 million ounces, down from 95 million in 2025. Although total supply is rising toward decade‑high levels, it remains insufficient to fully meet the current surge in investment demand,” he added.

From a technical perspective, the latest rebound has produced two lower highs, signalling fading conviction among buyers. After outperforming during the rally phase, silver bore the brunt of the correction and is still digesting that volatility shock.