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Dubai: Gold prices drop in early trade for third time this week

The US dollar is also gradually recovering from the pressure caused by recent statements from Federal Reserve policymakers

Published: Wed 4 Dec 2024, 9:57 AM

Updated: Wed 4 Dec 2024, 9:58 AM

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Gold prices slipped again at the opening of the markets in Dubai on Wednesday, marking the third consecutive drop in early trade this week.

At 9am UAE time on Wednesday, the 24K variant of the yellow metal fell to Dh320.5 per gram, down from Dh321.25 per gram at the close of the markets on Tuesday. Similarly, 22K, 21K and 18K also fell to Dh296.75, Dh287.25 and Dh246.25 per gram, respectively.

Globally, spot gold was trading at $2,650.3 per ounce, up 0.19 per cent.

Rania Gule, senior market analyst at XS.com, said gold prices dropping below the $2,640 per ounce level reflect a sense of caution in the financial markets ahead of the upcoming US employment data.

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“In my opinion, this drop occurred despite gold remaining within its recent range-bound trading, confirming that traders are waiting for further signals from the Federal Reserve regarding the future of monetary policy, especially with the impending release of the US Job Openings and Labor Turnover Survey (JOLTS), which could be a key indicator for understanding the central bank's future direction,” she said.

The US dollar is also gradually recovering from the pressure caused by recent statements from Federal Reserve policymakers, which have affected gold’s performance, as it typically has an inverse relationship with the dollar.

“The comments by Fed Governor Christopher Waller, indicating that monetary policy remains sufficiently restrictive, highlighted the possibility of a slower pace in interest rate cuts in the future, leading to mixed reactions in the markets. These statements reduced gold's appeal as a haven, but at the same time, they suggested the likelihood of ongoing inflation pressures, a factor that supports gold prices in the long term,” added Gule.

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