Gold prices stabilized on Tuesday, near their lowest levels in more than seven weeks, as investors awaited a series of US economic data this week, amid fears that the Federal Reserve will keep interest rates high for a longer period.
Gold settled in spot transactions at $4,124.57 per ounce by 01:40 GMT, after recording in the previous session its lowest levels since August 5. US gold futures fell 0.3 percent to $4,156.70.
Christopher Taher, chief market strategist at Exness, said that geopolitical developments will remain “crucial for gold,” explaining that continued tensions may keep energy prices and bond yields high, while tangible progress toward reducing escalation may ease pressures.
American and Iranian officials spoke separately with mediators as part of renewed efforts to end the war that has been ongoing for seven months.
Meanwhile, oil prices rose for the second straight session as concerns persist about supply disruptions from the Middle East.
High oil prices lead to increased inflationary pressures by raising the costs of various sectors of the economy, which may prompt central banks to keep interest rates high to contain price pressures.
Although gold has traditionally been seen as an inflation hedge, it is under pressure in a high interest rate environment, as yielding investments tend to lure investors away from the non-yielding metal.
Markets are currently pricing in a 70.3 percent chance that the Federal Reserve will raise interest rates in October, according to CME's Fed Watch tool.
Lisa Cook, a member of the Federal Reserve Board of Governors, said that she expects inflationary pressures to continue in the coming months due to demand related to artificial intelligence and high oil prices, without indicating that this will require further raising interest rates.
This week, investors' eyes are turning to a set of US economic data, including job opportunities, the ADP jobs report, personal consumption expenditures data, in addition to the non-farm payrolls report, in search of new indicators regarding the path of monetary policy.
Taher said that continued price pressures in conjunction with the strength of economic activity will enhance expectations that central banks need to continue their restrictive monetary policy, which will keep bond yields high and make gold vulnerable to further losses.
In other precious metals, silver fell in spot transactions 0.6 percent to $60.62 per ounce, platinum fell 1 percent to $1,699.86, while palladium fell 0.5 percent to $1,209.08.
“Ruya Al-Haram Al-Makki”, affiliated with the Saudi Public Investment Fund, has concluded a cooperation agreement with the Malaysian company “MRCB”, to study the development of a major multi-use destination integrated with the transportation system within the “King Salman Gate” project in Mecca, with a total value estimated at about 21 billion riyals ($5.6 billion).
The agreement signed between “Rowaa Al-Haram Al-Makki”, the main developer of the Gateway Project, and “MRCB”, the leader in real estate and infrastructure development, in the Malaysian capital, Kuala Lumpur, on Monday, is subject to completing due diligence procedures, obtaining the necessary approvals and financing, determining the implementation stages, and concluding final agreements.
The cooperation agreement was signed by “Ruya Al-Haram Al-Makki” CEO, Bambang Kajairi, and “MRCB” Group Managing Director, Imran Saleem, in the presence of the Fund’s Governor, Yasser Al-Rumayyan, the Head of the General Department of Local Real Estate Investments at the Public Investment Fund, Saad Al-Karroud, the Chairman of the Board of Directors of “MRCB”, Muhammad Abdul Latif, and the Chairman of the Board of Directors of “MRCB Land” Private Limited, Muhammad Zaini.
The cooperation agreement opens a path for attracting international investments to participate in the development of the “King Salman Gate” project, which embodies the country’s efforts to enrich the experience of the guests of God and visitors from various parts of the world, while preserving the unique heritage of Mecca, as it supports its endeavors to enhance the ability of the Holy Capital to serve them, in line with the goals of “Saudi Vision 2030.”
“Visions of the Holy Mosque of Mecca” works to provide a regulatory framework that allows international institutions from around the world to invest in developing the project, while the company continues to lead its comprehensive vision and supervise its implementation. This partnership also reflects its role in linking the investment and institutional capabilities of the Fund on the one hand, and international capital and development expertise on the other hand.
The cooperation agreement focuses on benefiting from MRCB’s expertise in developing projects related to integrated transportation systems, most notably “KL Sentral,” the largest integrated transportation center in Malaysia that combines transportation networks and a variety of urban uses.
The proposed project includes studying the development of a public bus station, residential and commercial projects, retail stores, and other multiple uses within “King Salman Gate,” as well as infrastructure. The partnership aims to study ways to employ the transportation system and support services to facilitate the movement of the pilgrims and visitors, enhance ease of access, and improve their experience in Mecca.
The agreement will also discuss developing an integrated framework for developing, financing and implementing the proposed project, benefiting from the vision of “Visions of the Holy Mosque in Mecca” for “King Salman Gate” and the expertise of “MRCB” in major multi-use projects linked to transportation systems, in order to achieve integration between investment, development, transportation solutions, and visitor services.
It is noteworthy that “Visions of the Holy Mosque in Mecca” seeks to attract leading international partners to continue to strengthen the Kingdom’s efforts aimed at improving the experience of the guests of God and visitors in Mecca in accordance with the highest international standards.
