By: Economy Middle east

Gold prices edged up on Thursday as investors kept an eye on talks between U.S. President Donald Trump and Chinese President Xi Jinping, while also awaiting signs of progress in the Iran war.

Spot gold rose 0.21 percent to $4,707.56 an ounce as of 4:33 GMT, while U.S. gold futures for June delivery gained 0.17 percent $4,714.72.

In the UAE, gold rates marked a notable increase, with 24-carat gold rising AED3.75 to AED567.5 and 22-carat gold increasing AED3.5 to AED525.5.

Additionally, 21-carat gold gained AED3.25 to AED503.75, and 18-carat gold edged up AED2.75 to AED431.75.

Meanwhile, 14-carat gold ticked up AED2 to AED336.75.

Investors focus on prospects of easing geopolitical tensions

Gold prices rose as investors remained cautious ahead of the Trump-Xi summit in Beijing, where talks are expected to center on trade relations, the Iran conflict and risks to global supply chains. Markets are watching for any indication that the two leaders could ease geopolitical tensions that have unsettled commodities and currency markets in recent weeks.

Donald Trump is set to hold a series of meetings with Xi in Beijing as he looks to secure economic gains, preserve a fragile trade truce and address sensitive issues, including the Middle East conflict.

Trump is also expected to push for China’s support in ending the war he launched alongside Israel in late February, although analysts believe Beijing is unlikely to provide the backing he seeks.

Gold, often seen as a safe haven during geopolitical uncertainty, received support from ongoing concerns over the Middle East conflict and potential disruptions in the Strait of Hormuz, a critical passage for global oil flows.

However, stronger U.S. inflation data and a firmer U.S. dollar capped gains in gold prices.

U.S. inflationary pressures mount as dollar index holds near two-week high

Meanwhile, data released on Wednesday showed U.S. producer prices recorded their sharpest rise in four years in April, driven by surging goods and services costs, in another sign of mounting inflationary pressures. Consumer inflation also came in above expectations as higher energy costs linked to the Iran conflict began to feed through the economy.

The data strengthened expectations that the Federal Reserve may keep interest rates elevated for a longer period, which weighs on gold prices by reducing the metal’s attractiveness of non-yielding assets.

The U.S. dollar index also held near a two-week high following the inflation figures, adding further pressure on bullion by making gold more expensive for international buyers.

The U.S. Senate confirmed Kevin Warsh as chair of the Federal Reserve as the central bank faces mounting inflationary pressures that could complicate efforts to deliver the interest-rate cuts sought by Trump. Although gold is widely viewed as a hedge against inflation, higher interest rates typically reduce the appeal of the non-yielding metal.

Traders also kept an eye on India’s decision to increase import duties on gold and silver, aimed at curbing overseas purchases and supporting the country’s foreign exchange reserves. The measure is expected to weaken physical demand in one of the world’s biggest consumers of bullion.

Other precious metals

As gold prices rose on Thursday,  the broader precious metals market witnessed mixed movement. Spot silver declined 1.02 percent to $87.08 per ounce, while platinum gained 0.04 percent to $2,138.30. Meanwhile, palladium edged down 0.05 percent to $1,499.00.