By: Economy Middle East

Gold prices edged higher on Friday, putting the precious metal on track for a third consecutive weekly gain, as a weaker U.S. dollar and the Treasury’s bond buyback plan supported sentiment.

As of 5:35 GMT, spot gold rose 0.44 percent to $4,539.07 an ounce, after reaching its highest level since early June in the previous session. The metal has gained 3.6 percent so far this week. Meanwhile, U.S. gold futures advanced 0.51 percent to $4,594.90.

In the UAE, gold rates edged higher, with 24-carat gold rising AED3 to AED547 and 22-carat gold gaining AED2.75 to AED506.5.

In addition, 21-carat gold rose AED2.75 to AED485.75 and 18-carat gold edged AED2.25 higher to AED416.25.

Meanwhile, 14-carat gold added AED1.75 to AED324.75.

Gold prices rise as U.S. dollar dips

A weaker U.S. dollar has supported gold prices and other precious metals, while a significant shift in Treasury yields has also helped bolster demand. The greenback was headed for a weekly decline, making dollar-denominated gold cheaper for international buyers.

U.S. Treasury Secretary Scott Bessent said the government could further expand its Treasury buyback program. The Treasury announced on Wednesday that it would double buybacks of longer-dated securities to at least $4 billion per operation during the next quarter.

Meanwhile, two Federal Reserve officials voiced caution over the potential impact of the Treasury Department’s debt-management changes on the central bank’s monetary policy.

Gold’s next move will depend largely on the Fed’s upcoming decisions and how they shape market expectations for interest rates.

Fed rate hike bets ease as U.S. labor market remains resilient

Data released Thursday showed that U.S. jobless claims declined last week, indicating that the labor market remains relatively stable despite an unexpected drop in employment in July. This could allow the Federal Reserve to maintain its focus on controlling inflation.

Markets are now pricing in a 63 percent probability that the Fed will leave interest rates unchanged next month, compared with a 37 percent chance of a rate hike, according to the CME FedWatch Tool.

While gold is generally considered a hedge against inflation, higher interest rates can reduce its appeal because the precious metal does not generate a yield.

On the geopolitical front, U.S. Treasury Secretary Scott Bessent said Washington would impose the “toughest sanctions in history” on Iran, adding to uncertainty in the global market.

On Wednesday evening, U.S. President Donald Trump also warned Tehran of economic warfare and isolation on an unprecedented scale, threatening consequences for countries providing any form of support to Iran.

Other precious metals

As gold prices rallied, the broader precious metals market was trading higher. Spot silver rose 1.3 percent to $68.93 an ounce, while platinum advanced 2 percent to $1,865.29 and palladium gained 0.8 percent to $1,344.44. All three precious metals were on course to post weekly gains.