UAE Gold Prices Drop by Dh3 per Gram in 24-Hour Global Shift
Gold prices in the UAE experienced a decline of Dh3 per gram in the past 24 hours, reflecting the global downward trend. The 24K variant, considered a benchmark, opened at Dh245.25 per gram on Wednesday, compared to the previous night's close at Dh246.75 per gram. Other variants, including 22K, 21K, and 18K, also saw decreases, trading at Dh227.0, Dh219.75, and Dh188.5 per gram, respectively.
This drop in gold prices is in line with the global market, where spot gold experienced a 0.4% decrease to $2,020.24 per ounce at 9:22 am UAE time. This decline follows a substantial 1.3% drop in the previous session, marking its most significant single-day decrease since December 4, 2023.
The primary driver behind the decrease in gold prices is the strengthening of the US dollar. Fed governor Christopher Waller's comments on Tuesday emphasized that, although inflation is nearing the central bank's 2% goal, there is no rush to lower interest rates until sustained lower inflation is evident.
According to Alex Kuptsikevich, a senior market analyst at FxPro, the impact of a rising dollar, coupled with overly optimistic expectations for an interest rate easing cycle, is contributing to gold's decline. The analyst notes that a technical pullback behind the dollar's strength is occurring after market expectations set during the March meeting for rate cuts at every Fed meeting.
Kuptsikevich further highlights the potential for increased pressure on gold if the dollar strengthens further from its current levels. Gold is losing its attractiveness in this scenario, especially against the backdrop of high yields on US bonds, supported by the growth of the US currency.
Investors and observers will closely monitor further developments in the global economic landscape, including central bank policies and currency movements, to gauge the trajectory of gold prices. The intricate relationship between the US dollar, inflation expectations, and interest rate dynamics will likely continue to influence precious metal markets in the coming days.
As the gold market remains sensitive to a variety of economic factors, individuals and institutional investors may adjust their strategies based on evolving market conditions. The recent decline in gold prices, attributed to a stronger US dollar, underscores the importance of monitoring geopolitical and economic indicators for those participating in the precious metals market.
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By- Sahiba Suri
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