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Dubai: Gold prices drop further on first day of trading week, remain under pressure

The yellow metal has been trending downwardly after reaching all-time high due to Middle East geopolitical tensions

Published: Mon 7 Oct 2024, 9:40 AM

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Gold prices fell further on the first trading day of the week, losing Dh0.75 per gram in Dubai in early trade as prices remained under pressure.

At 9 am UAE time, the 24K variant of the yellow dropped to Dh320.5 per gram compared to Dh321.25 over the weekend. Among the other variants, 22K opened lower at Dh296.75, 21K at Dh287.25, and 18K at Dh246.25 per gram.

The yellow metal has been trending downwardly over the past few sessions after reaching all-time high over the previous weeks due to geopolitical tension in the Middle East and expectations around further interest rate cuts by the US Federal Reserve.

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Spot gold was trading at $2,646.36 per ounce, down 0.17 per cent at 9.10 am UAE time.

Bas Kooijman, CEO and asset manager of DHF Capital, said gold prices came under pressure as investors reacted to the latest NonFarm Payrools (NFP) data. “The data showed a significantly higher-than-expected figure. While the market was anticipating a 140,000 figure, the actual data was at 254,000. In addition, August figures were revised to the upside, showing a more solid jobs market in the US than previously anticipated. The strength of the job market could leave the Federal Reserve with more room to manage interest rates as it could soften its monetary policy at a slower pace than hoped for by the market,” he said.

“A milder rhythm of interest rate cuts could leave the gold market with less support and could limit its ability to record new highs and could expose the market to short-term losses. Although gold could continue to see favourable factors such as geopolitical concerns and central bank purchases, traders could continue to monitor new developments and data in the US as they reassess their view on interest rates,” said Kooijman.

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