By Yara Abi Farraj

Saudi Arabia gold prices rise, global rates up as traders await rate cut cues

China's central bank marked its 18th consecutive month of gold purchases in April

The release of U.S. consumer price index data on May 15 will provide further insights into the trajectory of monetary policy

Gold prices saw an increase on Wednesday as markets awaited new cues for further clarity on the timing of the next interest rate cut.

In Saudi Arabia, 24-carat gold saw a 0.02 percent increase to SAR279.23 per gram and SAR8,684.32 per ounce.

Globally, spot gold saw a 0.20 percent increase to $2,318.77 per ounce, as of 5:14 GMT. Meanwhile, U.S. gold futures saw a 0.12 percent increase to $2,327.10.

Gold prices increased despite the dollar index rising 0.14 percent, which makes greenback-priced gold more expensive for other currency holders.

U.S. economic data

Investor attention now turns to key data such as the University of Michigan‘s consumer sentiment reading scheduled for Friday and forthcoming comments from several Federal Reserve officials. Additionally, the release of U.S. consumer price index data on May 15 will provide further insights into the trajectory of monetary policy.

Analysts highlighted the Fed’s cautious approach, noting that upcoming inflation reports could influence future rate decisions and, consequently, impact gold prices. However, markets believe that the central bank will not hike rates any further.

Minneapolis Federal Reserve Bank President Neel Kashkari emphasized the need for a prolonged period of stable borrowing costs, citing subdued inflation trends and the strength of the housing market as contributing factors.

Market sentiment indicates a 65 percent probability of a U.S. interest rate cut in September, according to CME’s FedWatch Tool, reflecting ongoing uncertainties surrounding monetary policy.

Read: Oil prices slide as U.S. inventories surge, demand weakens

China’s bullion reserves

China’s central bank continued its streak of gold purchases, acquiring 60,000 troy ounces in April, marking the 18th consecutive month of purchases. Analysts view China’s actions as a potential factor influencing gold prices.

Other precious metals

In addition to the increase in gold prices, spot silver rose 0.33 percent to $27.36 per ounce, palladium also increased by 0.33 percent to $974.43 while platinum saw a 0.03 percent decline to $975.72.

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