Sun, Nov 10, 2024 | Jumada al-Awwal 8, 1446 | DXB ktweather icon0°C

UAE: Gold prices continue to fall, plunge Dh5.5 per gram this week

Spot gold edged 0.1 per cent lower to $2,006.88 per ounce by 9.25am UAE time

Published: Thu 18 Jan 2024, 9:41 AM

Top Stories

The drop in gold prices continued in the UAE on Thursday morning, reaching a 5-week low.

The Dubai Jewellery Group data showed 24K trading at Dh243.25 per gram at the opening of the markets on Thursday as compared to last night’s close of Dh245.0 per gram. Similarly, 22K, 21K and 18K variants of the precious were trading lower at Dh225.25, Dh218.0 and Dh186.75 per gram, respectively.

The yellow metal prices in the UAE have dropped by Dh5.5 per gram this week so far.

Spot gold edged 0.1 per cent lower to $2,006.88 per ounce by 9.25am UAE time on Thursday. It fell to $2,001.72 on Wednesday - its lowest since December 13, 2023, due to hawkish remarks from Federal Reserve officials and robust data dampening investors' expectation for deeper and early interest rate cuts in the US this year.

Vijay Valecha, chief investment officer, Century Financial, said yellow metal facing significant declines due to increased demand for the US dollar, which regained its safe-haven appeal amidst escalating Middle East tensions and reduced expectations for aggressive Fed rate cuts this year.

The dollar strengthened, reaching a five-week high near 103.40 on Tuesday, driven by reports of Iran's missile attacks near the US Consulate in Erbil, Iraq, and Houthi rebels targeting a US-owned cargo vessel off Yemen's coast.

“The subdued risk sentiment and a less dovish speech by Fed Governor Christopher Waller contributed to the dollar’s comeback. As gold is dollar-denominated, it experienced repercussions from the stronger dollar. However, its status as a safe-haven asset during uncertain times might mitigate losses,” said Valecha.

Ole Hansen, head of commodities strategy, Saxo Bank, said one of gold’s biggest achilleas remains the lack of interest from investors through ETFs, where total holdings continue to drop, falling to a near four-year low.

“Until we see the funding cost of holding a gold position beginning to come down, the prospect of a price-supportive pickup in demand seems limited. Speculators in the futures market, meanwhile, will continue to add volatility to the market as they buy in the strength, only to reduce their exposure as prices weaken,” he said.

ALSO READ:



Next Story