By: Economy Middle east

Gold prices edged higher on Thursday as the U.S. dollar eased from its four-month high, while investor sentiment remained cautious amid ongoing uncertainty over the U.S. economic outlook and the prolonged government shutdown.

In the UAE, gold rates inched up, with 24-carat gold gaining AED1.25 to AED480.75 and 22-carat gold rising AED1.5 to AED445.25. Additionally, 21-carat gold edged up AED1 to AED426.5, and 18-carat gold gained AED1.25 to AED365.75.

Globally, spot gold rose 0.12 percent to $3,988.28 per ounce by 5:33 GMT, while U.S. gold futures for December delivery gained 0.11 percent to $3,997.30. The precious metal has retreated roughly 9 percent since reaching a record high of $4,381.21 on October 20.

Gold prices rise as U.S. dollar eases

“Gold has been consolidating in a range between $3,886 and $4,028 for the past few sessions, awaiting further catalysts to determine its next course. The precious metal has come under pressure amid the U.S. dollar’s longest winning streak since July,” said Vijay Valecha, chief investment officer, Century Financial.

However, the U.S. dollar’s upward trend seems to have subsided, with the index falling 0.17 percent to 100.04 after hitting a four-month high in the previous session, making gold prices less expensive for other currency holders.

Stronger-than-expected labor reading dampens rate cut hopes

U.S. private employers added 42,000 jobs in October, surpassing forecasts for a 28,000 increase, according to data from ADP on Wednesday. The stronger-than-expected labor reading could dampen hopes for imminent interest rate cuts.

With the congressional deadlock extending into the longest government shutdown in U.S. history, both investors and the Federal Reserve have been forced to depend more heavily on private-sector data to gauge the health of the economy.

The Federal Reserve lowered interest rates last week, but Fed Chair Jerome Powell signaled it could be the final cut of 2025. Market expectations for another rate reduction in December have since declined, with traders now pricing in a 63 percent chance of a move, down from more than 90 percent a week earlier, according to the FedWatch tool.

Gold, which offers no yield, typically benefits from lower interest rates as they reduce the opportunity cost of holding the metal.

Gold remains up nearly 50 percent this year 

“Despite the recent pullback, gold is still up nearly 50 percent YTD. After the stellar bull run this year, corrective dips of this nature are not only bound to happen, but also healthy. The fundamental factors driving the rally, such as central bank purchases and healthy private investor demand, remain intact and could take gold higher in the long term,” Valecha added.

On the trade front, U.S. Supreme Court justices on Wednesday questioned the legality of President Donald Trump’s broad tariff measures in a case that could carry significant implications for global trade.

Other precious metals

As gold prices rose, the precious metals market saw mixed movement on Thursday. Spot silver gained 0.44 percent to $48.28, while platinum fell 0.30 percent to $1,557.10. Meanwhile, palladium edged up 0.57 percent to $1,427.25.