In the United Arab Emirates, gold prices witnessed a modest drop of over Dh1 per gram at the opening of the markets on Monday. As reported by Dubai Jewellery Group data, the price of 24K gold started the week at Dh260.0 per gram, a slight decrease from the previous week’s closing price of Dh261.25 per gram. This downward trend was also reflected in other variants of the precious metal, with 22K gold opening at Dh240.75, 21K at Dh233.0, and 18K at Dh199.75 per gram.
On the global stage, spot gold also saw a decrease of 0.43 percent, valued at $2,147.3 per ounce as of 9.20 am UAE time.
This shift in gold prices comes after a period of sideways trading, influenced largely by reactions to unexpectedly strong US inflation data released last week. This data halted gold’s three-week winning streak, causing traders to reassess their expectations regarding potential interest rate cuts by the Federal Reserve in the coming year.
George Pavel, General Manager at Capex.com Middle East, commented on the current market dynamics. “The recent increase in inflation was unforeseen and has injected a level of uncertainty into the market, leading to potential risks of price correction. Additionally, a resurgence in treasury yields last week put further downward pressure on gold prices,” he explained.
Despite these factors, Pavel noted that markets are still factoring in the possibility of interest rate cuts beginning in June. The upcoming Federal Open Market Committee (FOMC) meeting this week is expected to be a significant determinant for the future trajectory of the gold market. Investors and traders will be paying close attention to the economic projections released by the Federal Reserve, as well as any comments from its president post-meeting. According to Pavel, a hawkish stance from the central bank could lead to further declines in gold prices.
The slight dip in gold prices in the UAE and globally highlights the sensitivity of the precious metal to broader economic indicators, especially regarding inflation and monetary policy. As such, the gold market continues to be an area of keen interest for investors and financial analysts alike.
