Gold prices declined on Thursday as the U.S. dollar and Treasury yields strengthened ahead of the release of key inflation data on Friday. The U.S. dollar rose 0.50 percent to over a two-week high, making gold more expensive to holders of other currencies and impacting prices.
In Saudi Arabia, 24-carat gold declined 0.52 percent to SAR280.79Â per gram and SAR8,733.52Â per ounce.
Globally, spot gold saw a 0.13 percent decline to $2,335.74 per ounce, as of 5:14 GMT. Meanwhile, U.S. gold futures saw a 0.32 percent decline to $2,333.70.
Economic data weighs on market
Gold prices saw a decline as traders highly anticipated the release of U.S. core personal consumption expenditures (PCE) price index data on Friday, which is the Federal Reserve’s preferred measure of inflation. Analysts expressed that higher PCE data raises the prospects of higher-for-longer U.S. interest rates, which increase the opportunity cost of holding non-yielding assets like gold, thus impacting their prices.
In addition, traders await the revision of first-quarter gross domestic product data, which is due later on Thursday. The data will likely reveal some resilience in the economy, which also gives the Fed more incentive to keep interest rates higher for longer. According to the CME FedWatch Tool, traders are currently pricing in about a 60 percent chance of a rate cut by November.
Read: Saudi Arabia gold prices decline, global rates dip as traders reduce rate cut expectations
Other precious metals
In line with the decline in gold prices, the precious metals market also saw declines. Spot silver saw a 0.89 percent decline to $31.67 per ounce. Platinum dipped 0.39 percent to $1,031.50, while palladium fell 1.80 percent to $947.98.
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