On Monday morning, gold traders in the UAE and around the world witnessed a noticeable dip in prices, with markets keenly anticipating insights from US Federal Reserve Chair Jerome Powell’s upcoming speech on potential interest rate changes.
In early trade, the price of 24K gold in the UAE fell, opening at Dh231.75 per gram, a slight decrease from the previous close of Dh232.25 per gram. Prices of 22K, 21K, and 18K followed suit, opening at Dh214.75, Dh207.75, and Dh178.0 per gram, respectively. On the global front, spot gold also experienced a decline of 0.18 percent, standing at $1,916.02 per ounce as of 9.30 am UAE time.
Market analyst Rania Gule of XS.com noted that despite experiencing a robust gain of 3.5 percent on Friday, the precious metal retreated from its peak levels in Monday’s trading, stabilizing around $1,920. This shift comes in the wake of recent geopolitical tensions, with the escalating conflict in Palestine prompting investors to move towards safe-haven assets, pushing gold prices to close at $1,933 on Friday, a significant leap from a low of $1,868 per ounce within mere hours.
Gule shared a bearish outlook for gold prices, suggesting a potential faster-than-expected decline. Drawing parallels with past trends, particularly the surge in gold prices following the Russian invasion of Ukraine in February 2022, she highlighted how gold’s ascent continued for several days but didn’t sustain beyond two weeks before experiencing a reversal. Applying this historical insight to the current Middle East conflict, Gule predicts a similar downturn could be on the horizon, potentially within the week.
Investors and market watchers now have their eyes set on Powell’s imminent address, which is expected to shed light on the US Federal Reserve’s stance on interest rates, a key driver in global financial and commodity markets, including gold. The speech’s outcomes could further influence market movements, adding another layer of complexity to gold’s price trajectory amidst prevailing geopolitical tensions.
