By: Economy Middle east

Gold prices rose on Friday, boosted by a softer U.S. dollar, while traders looked ahead to key inflation data for clues on the Federal Reserve’s policy direction before next week’s meeting.

In the UAE, gold rates witnessed notable increases, with 24-carat gold rising by AED2 to AED508 and 22-carat gold gaining AED2 to AED470.5.

Additionally, 21-carat gold added AED1.75 to reach AED451, while 18-carat gold gained AED1.75 to AED386.75.

Meanwhile, 14-carat gold gained AED1.25 to AED301.5.

Globally, spot gold was up 0.35 percent to $4,228.01 per ounce as of 6:27 GMT and was set for a 0.3 percent weekly drop. Meanwhile, U.S. gold futures inched up 0.35 percent to $4,258.05 per ounce.

U.S. dollar remains near five-week low

Yields on benchmark 10-year U.S. Treasury notes held close to their highest point in over two weeks. Meanwhile, the U.S. dollar remained near a five-week low against major currencies, making gold priced in the greenback more appealing to international buyers.

“The metal has been range-bound since October 28, as investors await critical economic data to assess the health of the economy,” said Vijay Valecha, chief investment officer, Century Financial.

U.S. data released on Thursday showed jobless claims dropping to 191,000 last week — the lowest level in over three years and far below the expected 220,000. Meanwhile, ADP figures on Wednesday indicated that private-sector payrolls fell by 32,000 in November, marking the steepest decline in more than two and a half years.

“After two rate cuts this year, the Fed funds target range currently stands at 3.75–4.00 percent, down from the 5.25–5.50 percent peak reached in 2023. Markets are almost fully priced for a 25bp cut at the 9–10 December FOMC meeting, taking the Fed funds target range down to 3.50–3.75 percent from 3.75–4.00 percent,” said Charu Chanana, chief investment strategist, Saxo Bank.

Lower interest rates generally boost the appeal and prices of non-yielding assets like gold.

Investors are now awaiting the delayed September Personal Consumption Expenditures (PCE) Index, the Federal Reserve’s preferred inflation measure, which is set to be released at 15:00 GMT.

Cautious cut to keep structural support under precious metals

“Fed fund futures and tools such as CME FedWatch show markets assigning around 85–90 percent probability to a 25bp cut at the December meeting. Beyond December, markets are pricing around 75–90bp of total cuts into late-2026, effectively assuming a gentle but persistent easing cycle. The risk for markets is not whether the Fed cuts once in December – that’s largely in the price – but how strongly policymakers push back against the idea of a long, uninterrupted cutting cycle,” added Chanana.

A December cut should reinforce the downtrend in short-dated yields, but longer maturities may oscillate between growth fears and term-premium concerns, she explained. If the Fed pushes back against aggressive 2026 cut expectations, the yield curve may re-steepen bearishly.

A well-telegraphed 25bp cut is largely priced in and may not trigger a dramatic dollar reaction on its own. The bigger swing factor is guidance for 2026: Strong pushback on aggressive cuts could give the USD a short-term lift, especially versus low-yielders. Meanwhile, a more dovish tone could extend the drift lower in the dollar and support higher-beta FX and selected EM currencies, Chanana added.

Gold prices are trading near record levels and have already reacted positively to the broader easing cycle and real-yield downtrend. A cautious cut that doesn’t derail the easing narrative should keep structural support under precious metals, but short-term volatility is likely given crowded positioning.

“Silver’s run has been even more dramatic, amplifying both upside and downside moves around Fed events,” she added.

“A hawkish surprise or a sudden rise in real yields could trigger deeper corrections in both metals, even if the long-term case on de-dollarization, fiscal deficits and energy transition remains intact,” Chanana added.

Other precious metals

As gold prices rose on Friday, the precious metals market saw upward movement. Spot silver gained 2.15 percent to $58.34, while platinum rose 0.41 percent to $1,652.67 and palladium gained 1.09 percent to $1,464.24.