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Time to buy? UAE gold prices fall further, dropping Dh3 per gram in the past 24 hours

Analyst says further strengthening of the dollar from current levels promises to significantly increase the pressure on gold

Published: Wed 17 Jan 2024, 9:38 AM

Updated: Wed 17 Jan 2024, 10:25 AM

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Photo: Reuters file

Photo: Reuters file

Gold prices fell one-and-a-half dirham in the UAE on Wednesday morning in line with the drop in global rates.

The 24K variant of the precious metal opened at Dh245.25 per gram on Wednesday as compared to last night’s close of Dh246.75 per gram. Similarly, 22K, 21K and 18K were also trading lower at Dh227.0, Dh219.75 and Dh188.5 per gram, respectively.

The 24K variant of the yellow metal has fallen by Dh3 per gram since Tuesday morning when it was trading at Dh248.25 per gram as the US dollar continued to strengthen.

Globally, spot gold was down 0.4 per cent at $2,020.24 per ounce at 9.22 am UAE time, after plunging 1.3 per cent lower in the previous session – its biggest single-day decline since December 4, 2023.

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Fed governor Christopher Waller said on Tuesday that while inflation was approaching the central bank's 2 per cent goal, the Fed should not rush to lower interest rates until lower inflation can clearly be sustained.

Alex Kuptsikevich, senior market analyst at the FxPro, said the yellow metal is losing due to the impact of a rising dollar after policymakers in Davos flagged overly optimistic expectations for an interest rate easing cycle.

“Commentators are trying to find a link between hawkish comments from eurozone (not US) policymakers and the rise of the dollar. But we tend to see a technical pullback behind the dollar strength after markets clearly jumped over their heads in their expectations, laying down rate cuts at every Fed meeting since the March meeting,” said Kuptsikevich.

He added that further strengthening of the dollar from current levels promises to significantly increase the pressure on gold, which is losing its attractiveness against the background of high yields on US bonds, supported by the growth of the US currency.

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