Gold prices in Dubai experienced a slight increase on Thursday morning, following the US Federal Reserve’s decision to raise interest rates by 25 basis points. The Fed also indicated that it might pause future rate hikes due to recent instability in the financial sector. As of 9:30 am UAE time, spot gold rose by 0.34 percent to $1,976.4 per ounce.
In the UAE, precious metal prices edged higher, reflecting global rates. Data from the Dubai Jewellery Group revealed that 24K gold opened at Dh239.5 per gram on Thursday morning, compared to the previous evening’s close of Dh239.25. Additionally, 22K, 21K, and 18K gold traded at Dh221.75, Dh214.75, and Dh184.0 per gram, respectively.
Gold prices jumped by two percent on Wednesday after the Fed’s interest rate hike. The central bank’s indication that it may pause further increases in borrowing costs came in the wake of the recent collapse of two US banks. Fed policymakers believe that tackling inflation may necessitate just one more interest rate hike this year, with fewer easing measures needed in the coming year than previously anticipated three months ago.
The rise in gold prices reflects investors’ concerns about the impact of the Fed’s decisions on the global economy. As financial markets respond to the central bank’s moves, gold is often viewed as a safe-haven asset during times of economic uncertainty. The indication of a possible pause in future rate hikes signals that the Fed is taking the recent financial sector turmoil into account, which in turn influences gold prices.
