Gold prices plummeted on Friday, driven by profit-taking and speculation surrounding a possible second term for former U.S. President Donald Trump. The strengthening U.S. dollar, fueled by robust jobless claims data, also contributed to the decline in gold prices.
In the UAE, the price of 24-carat gold rose to AED293.50 per gram, while 22-carat gold fell to AED271.75. The prices for 21-carat and 18-carat gold also dropped to AED263.25 and AED225.50, respectively.
Globally, spot gold fell by 0.9 percent to $2,423.89 per ounce, with gold futures for August declining by 1.2 percent to $2,426.45 per ounce. Despite reaching record highs earlier in the week, gold prices were now trading $50 lower as investors took profits following a strong rally over the past seven days.
The initial surge in gold prices was driven by expectations of interest rate cuts by the U.S. Federal Reserve, with traders predicting a 25-basis-point reduction in September. However, the dollar gained strength this week due to better-than-expected jobless claims data, influencing the Fed’s decision on rate cuts.
Speculation over Trump’s potential return to office following a surge in popularity after a failed assassination attempt also boosted the dollar. This led traders to believe that Trump’s policies could attract more capital back to the U.S.
Meanwhile, other precious metals like platinum and silver also followed the downward trend set by gold prices. In the industrial metals market, copper prices remained steady on Friday but still nursed losses from earlier in the week. Uncertainty surrounding China, the top importer of copper, played a significant role in the fluctuations of copper prices.
Overall, the market was influenced by a combination of geopolitical factors, economic data, and investor sentiment. Investors will be closely monitoring developments to gauge the future direction of precious metal and industrial metal prices in the coming weeks.
