By: Economy Middle east

Gold prices eased on Thursday as investors locked in profits following a near two-week high in the previous session, while markets assessed the likelihood of a U.S. interest rate cut in December against mixed signals from the Federal Reserve.

In the UAE, gold rates held steady on Thursday, with 24-carat gold at AED500.25 and 22-carat gold at AED463.25. Additionally, 21-carat gold remained at AED444.25, and 18-carat gold held at AED380.75.

Globally, spot gold was down 0.35 percent at $4,153.1 per ounce as of 5:30 GMT, while U.S. gold futures for December delivery slipped 0.34 percent to $4,151.10.

Rate cut bets rise on labor market softness

Gold prices declined as conflicting guidance on the timing and scale of potential rate cuts has spurred a pickup in hedging activity, with investors increasingly turning to swaptions and other derivatives linked to overnight rates to shield portfolios from mounting policy uncertainty.

Several Federal Reserve officials, including New York Fed President John Williams and Governor Christopher Waller, have signaled that a December rate cut could be justified, citing labor market softness that is exerting downward pressure on Treasury yields.

“The yellow metal was supported by a softer U.S. dollar and strengthening expectations of a December Federal Reserve rate cut. Weakness in delayed U.S. economic data, including softer retail sales and a sharp drop in consumer confidence, reinforced the view that economic momentum is cooling,” said Vijay Valecha, chief investment officer, Century Financial.

The Fed officials’ position, however, stood in contrast to the views of several regional Fed presidents who argued that policymakers should hold off on further easing until inflation demonstrates clearer progress toward the 2 percent goal. At the same time, Kevin Hassett, widely viewed as a leading candidate to succeed Jerome Powell as Fed Chair, has echoed President Donald Trump’s view that interest rates should be lower.

Traders are currently pricing an 85 percent chance of a December rate cut, according to the CME’s FedWatch tool. Lower interest rates typically enhance the appeal of non-yielding assets such as gold, supporting their prices.

Prospects of Ukraine-Russia deal pressure bullion

Weekly jobless claims declined last week, according to Wednesday’s data, but the labor market continues to struggle with creating sufficient opportunities for the unemployed. Meanwhile, U.S. consumer confidence slipped in November, weighed down by concerns over employment prospects and household finances.

On the geopolitical front, Russia described the U.S.-facilitated talks aimed at ending the Ukraine war as “serious,” but Kremlin spokesman Dmitry Peskov warned that a deal remains distant and that Moscow would not make major concessions. Meanwhile, U.S. President Donald Trump said a Ukraine-Russia agreement is “very close,” boosting optimism in markets.

The combination of potential diplomatic progress and expectations of lower U.S. interest rates has lent support to equities while keeping pressure on gold prices and other safe-haven assets.

Other precious metals

As gold prices declined, the precious metals market saw mixed movement on Thursday. Spot silver fell 0.88 percent to $52.88, while platinum surged 1.49 percent to $1,612.07. However, palladium dipped 1.62 percent to $1,400.25.