Dubai gold prices drop for second consecutive day after hitting peak

The yellow metal has lost Dh2.5 since Monday

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File Photo. Image used for illustrative purpose
by

Waheed Abbas

Published: Wed 18 Sep 2024, 9:19 AM

Last updated: Wed 18 Sep 2024, 9:27 AM

Gold prices fell further at the opening of the markets in Dubai on Wednesday in line with global prices ahead of the interest rate cuts by the US Federal Reserve later today.

At 9am, the 24K variant of the yellow metal was trading at Dh311 per gram, down Dh0.75 from last night’s close. Among the other variants, 22K, 21K and 18K opened lower at Dh288, Dh278.75 and Dh239.0 per gram, respectively.

After yellow metal hit an all-time high on Monday with 24K reaching Dh313.5 per gram, today is the second consecutive day that the yellow metal opened at lower rates. It has lost Dh2.5 since hitting the peak on Monday.

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Globally, spot gold was trading at $2,568.49 per ounce, down 0.21 per cent at 9.10am.

Marc Pussard, head of risk, APM Capital, said gold prices charged to a record high on Monday as a weaker dollar and the prospects of aggressive US monetary policy easing boosted non-yielding bullion's appeal.

Chris Weston, head of research at Pepperstone, said with the price consolidating at all-time highs, those positioned for a break of $2,600 need to hear a message that inspires new buying of gold, and it is not overly clear what that message needs to be.

“On one hand, I could argue that a 50bp cut married with a more concerned message could keep 2-year Treasury yields headed lower, which in turn would support gold – however, as we’ve seen in recent episodes, if equity tanks, even if the triggers are fundamentally supportive of gold price appreciation, then the yellow metal can get caught up in the broad de-risking and the liquidation seen in risky assets. Conversely, I’m not convinced a 25bp cut would be all that bad for the gold market – this call is conditional on the Fed indicating they have the appetite for bolder action in the November or December meeting if the data warrants, and we see equity trade higher - where increased risk appetite hits the US dollar,” said Weston.

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Waheed Abbas

Published: Wed 18 Sep 2024, 9:19 AM

Last updated: Wed 18 Sep 2024, 9:27 AM

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