By: Economy Middle east

Gold prices edged higher on Wednesday, buoyed by a higher-than-expected US unemployment rate in November, which fueled speculation of additional Federal Reserve rate cuts in 2026. Spot gold traded 0.70 percent higher around $4,332.23 per ounce, stabilizing near recent highs despite minor fluctuations. Similarly, U.S. gold futures rose 0.70 percent to $4,362.55.  This movement reflects broader market dynamics, including a weakening dollar and falling Treasury yields, making the non-yielding metal more attractive to investors. 

In the UAE, gold rates saw a rise on Wednesday. The price of 24-carat gold increased by AED2.00 to reach AED521.75. Similarly, 22-carat gold rose by AED1.75 to AED483.00, while 21-carat gold also went up by AED2.00, reaching AED463.25. Meanwhile, 18-carat gold saw a gain of AED1.50, bringing its price to AED397.00, and 14-carat gold increased by AED1.25 to AED309.75.

U.S. jobs data sparks rally

The U.S. unemployment rate climbed to 4.6 percent in November, surpassing economists’ forecasts of 4.4 percent from a Reuters survey, amid uncertainties tied to President Donald Trump’s aggressive trade policies. Despite some job growth, the data highlighted a cooling labor market, prompting traders to ramp up bets on two 25-basis-point Fed rate cuts next year. Bob Haberkorn, senior market strategist at RJO Futures, noted that this gives the Fed “more reason to cut interest rates,” interpreting it as a bullish signal for gold.

Powell’s dovish pivot

The Federal Open Market Committee last week delivered its third 0.25 percent rate cut of 2025, with Chair Jerome Powell’s comments viewed as dovish, reinforcing expectations for a low-rate environment where gold thrives. Interest rate futures indicate two more cuts in 2026, compressing real yields—a key driver for bullion. A government shutdown has tempered the Fed’s emphasis on recent labor figures, sustaining rate-cut optimism despite the slowdown.

Investors now eye Thursday’s November Consumer Price Index and Friday’s Personal Consumption Expenditures data for inflation clues that could sway Fed decisions. U.S. 10-year Treasury yields declined alongside the dollar’s two-month low, further supporting precious metals.

Silver’s historic surge to above $66

Silver prices reached unprecedented levels above $66 per troy ounce on Wednesday, driven by disappointing U.S. economic indicators that heightened recession fears and boosted safe-haven demand. The metal’s rally marks a continuation of its explosive 2025 performance, with year-to-date gains exceeding 124 percent.

Platinum jumped 3.49 percent to $1,939.55—its highest since September 2011—before easing slightly, driven by tight supply and rising demand. Palladium gained 1.32 percent to $1,685.00, a two-month peak.

Analysts attributed platinum group metals’ strength to supply constraints, while forecasting silver could retest $50 next year if trends hold. Moreover, analysts project robust gold gains into 2026. Ebkerian predicts $4,859-$5,590 if prices close 2025 above $4,400. J.P. Morgan eyes $5,000 by Q4 2026, potentially $6,000 longer-term, fueled by ETF inflows, central bank buying, and Fed easing. Gold has surged 62.52 percent year-over-year, with a 6.32 percent monthly rise as of December 16.