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Dubai: Gold prices drop in early trade

Globally, spot gold was trading at $2,637.89 per ounce, up 0.12 per cent in the morning

Published: Tue 3 Dec 2024, 9:28 AM

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Gold prices fell in Dubai at the opening of the markets on Tuesday after yesterday’s roller-coaster ride.

The Dubai Jewellery Group data showed a 24K variant losing Dh1 per gram to Dh319.5 per gram at 9am UAE time. The yellow metal fell over Dh3 per gram on Monday morning but recovered more than Dh2 later in the day.

Similarly, the other variants also opened lower on Tuesday with 22K, 21K and 18K selling at Dh295.75, Dh286.5 and Dh245.5 per gram, respectively.

Globally, spot gold was trading at $2,637.89 per ounce, up 0.12 per cent in the morning.

Tito Iakopa, commercial director at FlowCommunity, said gold prices retreated on Monday, primarily due to the strengthening of the US dollar.

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“This shift gained momentum following Donald Trump’s stern warning to BRICS nations. Trump threatened 100 per cent tariffs on any attempts to create or support an alternative currency to the dollar, echoing similar threats made to Canada and Mexico last week. These warnings have affected market sentiment, alongside expectations that Trump’s proposed tariff plans and expansionary policies could lead to increased inflation, potentially influencing the Federal Reserve’s future interest rate decisions,” said Iakopa.

All eyes are now on upcoming US economic data for clues on the Federal Reserve’s monetary policy outlook. Key releases include job openings, private wage growth, activity in the services and manufacturing sectors, and the unemployment rate. Market attention is also shifting to scheduled speeches from several Federal Reserve officials, including Chair Jerome Powell, which may provide further clarity on the central bank’s stance,” he said.

“The appeal of gold as a safe-haven asset has moderated somewhat following the US-brokered ceasefire between Israel and Hezbollah. However, ongoing geopolitical tensions, particularly in the Russia-Ukraine conflict, continue to support demand for gold, limiting substantial downside risk in the near term,” added Iakopa.

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