UAE: Gold prices drop slightly in early trade after jumping Dh3.50 per gram on Wednesday

The yellow metal got a boost on Wednesday after a fresh set of soft US data added to expectations that the US Federal Reserve will pause rate hikes this year, although inflation readings due later in the day could amend this outlook.

"Traders are waiting to see the full news cycle develop a more comprehensive view on inflationary pressures," Michael Langford, chief investment officer at Scorpion Minerals, told Reuters.

Nick Cawley, senior strategist at dailyFX, said the Fed is looking closely at the jobs market and any further signs of weakness will allow the US central bank more time to leave interest rates unchanged, and potentially bring forward the first rate cut.

“Gold is now back in a prior zone of support and is looking to break higher,” he said.

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