By: Economy Middle east

Gold prices remained steady on Thursday as investors anticipated key U.S. inflation data that could influence Federal Reserve rate decisions. Spot gold fell by 0.13 percent to $4,335.89 an ounce, following a more than 1 percent increase late on Wednesday. Meanwhile, U.S. gold futures decreased by 0.18 percent to $4,365.85, continuing a monthly gain of 6.83 percent and a remarkable year-over-year rise of 67.89 percent.

In the UAE, gold rates saw a slight drop on Thursday. The cost of 24-carat gold fell by AED1.00 to AED522.25. In a similar trend, 22-carat gold decreased by AED1.25 to AED483.50, and 21-carat gold also declined by AED1.25, reaching AED463.50. Additionally, 18-carat gold lost AED1.00, bringing its price to AED397.25, while 14-carat gold saw a reduction of AED0.75, settling at AED310.00.

Moreover, silver remained near record highs, highlighting contrasting trends in precious metals. It is currently trading 0.37 percent lower at $66.39. However, it has risen 29.11 percent over the month and 128.43 percent year-over-year, approaching its all-time high of $66.88 earlier in December. The surge in silver prices is driven by industrial demand for solar panels, electronics, and green technology, as well as a prolonged supply deficit.

Silver’s stellar surge

Silver shattered records earlier in December, peaking at $64.62 per ounce on December 12 after breaching $60 on December 9, nearly doubling year-to-date. Industrial usage in photovoltaics and EVs, coupled with investment flows and supply constraints from Chile and Peru, propelled the rally. Unlike gold, silver benefits from robust green energy demand, outpacing its yellow counterpart. 

Inflation data looms

Traders focused on Friday’s Personal Consumption Expenditures (PCE) inflation report, the Fed’s preferred measure, which could indicate prospects for rate cuts. Softer-than-expected data might boost gold by reinforcing easing expectations, especially after November’s unemployment rose to 4.6 percent, the highest since 2021. A stronger dollar and profit-taking limited gains, with MCX silver also softening ahead of the release.

The Bank of Japan’s policy decision on Friday adds volatility risks, as a potential rate hike to near three-decade highs could strengthen the yen and pressure bullion. Gold’s safe-haven appeal persists amid geopolitical tensions and fiscal uncertainties under President Trump’s administration. 

Gold’s 2025 trajectory marks its strongest year since 1971, driven by Fed rate cuts, economic growth forecasts, and central bank buying. Forecasts suggest potential climbs to $4,859-$5,590 in 2026 if it closes above $4,400 this year. Bearish risks include robust US growth under Trump policies hiking yields and the dollar.