By: Economy Middle east

Gold prices edged higher on Friday even as a stronger dollar and commodity index rebalancing weighed on the market, with investors positioning ahead of closely watched U.S. non-farm payrolls data due later in the session.

In the UAE, gold rates edged up on Friday, with 24-carat gold rising AED1.25 to AED537.75 and 22-carat gold gaining AED1.25 to AED498. Additionally, 21-carat gold inched up AED1.25 to reach AED477.5, while 18-carat gold edged up AED1 to AED409.25.

Meanwhile, 14-carat gold gained AED0.75 to AED319.25.

Globally, spot gold rose 0.41 percent to $4,470.57 an ounce by 5:36 GMT, and was on course for a weekly gain of over 3 percent. The metal reached a record high of $4,549.71 on December 26.

Meanwhile, U.S. gold futures for February delivery gained 0.22 percent to $4,470.60.

Bloomberg Commodity Index rebalancing to pressure prices

Gold prices rose even as the U.S. dollar climbed to a near one-month high, with traders awaiting a U.S. Supreme Court ruling on President Donald Trump’s use of emergency tariff powers. A firmer dollar typically weighs on demand by making dollar-denominated bullion more expensive for holders of other currencies.

As for U.S. non-farm payrolls data, economists are forecasting moderate job gains of around 60,000, alongside a small decline in the unemployment rate to 4.5 percent from 4.6 percent.

However, gold prices are likely to come under pressure in the coming days as the annual rebalancing of the Bloomberg Commodity Index gets underway this week, a routine process that adjusts commodity weightings to reflect prevailing market conditions.

“This could result in futures contracts being sold in the markets to comply with the rebalancing requirements. An estimated $6.8 billion in silver futures and an equivalent amount in gold futures are projected to be sold, deemed necessary after the blistering precious metal rally, which increased their weightings in the commodity indices,” said Vijay Valecha, chief investment officer, Century Financial.

“Nevertheless, the long-term fundamentals that drove the rally in both metals remain intact,” he adds.

U.S. non-farm payrolls report in focus

Weaker employment data has recently strengthened expectations for additional Federal Reserve rate cuts, lending support to gold prices. However, overall sentiment remains cautious, as investors stay alert to price volatility and the risk of profit-taking at elevated levels.

Gold is trading roughly $110 below its record high of $4,549.71, with advances capped by a stronger dollar and bouts of profit-taking. The U.S. dollar index rose 0.04 percent to 98.97 on Friday.

Data released on Wednesday showed U.S. job openings fell to a 14-month low in November, while hiring activity remained subdued, signaling a cooling labor market. Investors are now turning their attention to Friday’s U.S. non-farm payrolls report for further insight into the future path of monetary policy.

Gold prices could climb to $5,000 an ounce in the first half of 2026, driven by mounting geopolitical risks and rising debt levels, HSBC said. Non-yielding assets such as gold typically perform well when interest rates are low and during periods of economic uncertainty.

Other precious metals

As gold prices rose on Friday, spot silver gained 1.73 percent to $76.88 and is on course for a weekly gain of more than 5 percent after reaching a record high of $83.62 on December 29.

Spot platinum slipped 0.85 percent to $2,247.92 an ounce after touching an all-time peak of $2,478.50 last Monday, while palladium gained 0.45 percent to $1,793.83. Both platinum and palladium were also set to post weekly gains.