Dubai: Gold inches slightly higher, yet faces worst week in more than 3 years

Globally, spot gold was down 0.1 per cent at $2,562.61 per ounce, as of 9.54am UAE time

Published: Fri 15 Nov 2024, 2:01 PM

Updated: Fri 15 Nov 2024, 4:05 PM

By
Web Desk

Gold inched slightly higher on Friday, in its worst week in more than three years, hurt by a stronger US dollar amid expectations of fewer Federal Reserve rate cuts.

The Dubai Jewellery Group data showed the 24K variant of the yellow metal inch up Dh1.75 per gram to Dh310.75, from Dh309 per gram at the close of the markets on Thursday.

Among the other variants, 22K, 21K and 18K dipped to Dh287.75, Dh278.50 and Dh238.75 per gram, respectively.

Globally, spot gold was down 0.1 per cent at $2,562.61 per ounce, as of 9.54am UAE time. It has fallen more than 4 per cent so far in the week.

Bullion hit a two-month low in the previous session and has declined more than $220 from the record peak hit last month.

The US dollar continued its relentless march higher this week following Donald Trump's election victory, making bullion more expensive for other currency holders.

Gold's weakness reflects expectations of a more restrictive US monetary policy in 2025 under Trump, said Fawad Razaqzada, market analyst at Forex.com.

Higher interest rates increase the opportunity cost of holding bullion.

Fed Chair Jerome Powell said on Thursday steady economic growth, a strong job market, and persistent inflation justify caution in cutting rates quickly.

According to the CME Fedwatch tool, markets see a 59 per cent chance of a 25-basis-point rate cut in December, down from 83 per cent a day ago.

"While Powell's comments could cap gains for gold as we head into the new year, another turbulent term for President Trump could also see it attract safe-haven flows," said Matt Simpson, senior analyst at City Index.

With a quiet US calendar next week, gold could rebound, potentially retesting $2,600 level, Simpson said.

Data on Thursday showed that U.S. producer prices picked up in October, adding to signs that progress towards lower inflation was stalling.

(With inputs from Reuters)

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