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Dubai: Gold prices slip in early trade

Analysts expect the yellow metal will continue to trade above Dh300 per gram due to geopolitical tension in the Middle East

Published: Tue 27 Aug 2024, 9:35 AM

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KT Photo: Shihab

KT Photo: Shihab

Gold prices slipped at the opening of the markets in Dubai on Tuesday.

According to Dubai Jewellery Group data, the 24K variant was trading at Dh303.75 per gram at the opening of the markets on Tuesday as compared to last night’s close of Dh304.5 per gram. Yesterday, it touched a high of Dh305.75 per gram in mid-day trade.

Analysts expect the yellow metal will continue to trade above Dh300 per gram due to geopolitical tension in the Middle East and interest rate cut expectations by the US Federal Reserve.

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Among the other variants, 22K, 21K and 18K dropped to Dh282, Dh273 and Dh234 per gram, respectively, in Dubai on Tuesday.

Globally, gold was trading at $2,509.21 per ounce, down 0.27 per cent.

Oliver Stevens, product development and market expansion manager at Flow Community, said US Federal Reserve Chair Jerome Powell's remarks have reinforced market expectations of an interest rate cut in September. This typically supports the yellow metal’s attractiveness by lowering the opportunity cost of holding non-yielding assets like gold.

“During his speech at the Jackson Hole Symposium, Powell hinted at the Federal Reserve’s readiness to adjust its monetary policy based on forthcoming economic data. This has supported market confidence that the Fed will reduce rates, with current projections indicating a potential cut of either 25 basis points (bps) or 50 bps in the upcoming September meeting. Moreover, expectations of a total reduction of 100 bps by the end of the year further support gold prices,” said Stevens.

He added that geopolitical tensions, particularly in the Middle East, combined with broader economic uncertainties, are driving heightened interest in gold as a safe-haven asset. “These ongoing factors are expected to sustain gold’s appeal and support its price, as investors turn to gold for stability in the face of potential global disruptions.”

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