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UAE: Gold prices drop Dh1 per gram as yellow metal slips 1% in early trade

The yellow metal could see more volatility this week as several important announcements will be made including headline CPI

Published: Tue 12 Dec 2023, 9:49 AM

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Gold prices fell one dirham per gram in the UAE at the opening of the markets on Tuesday.

According to Dubai Jewellery Group data, 24K was trading at Dh240.5 per gram on Tuesday morning as compared to last night’s close of Dh241.5. While 22K, 21K and 18K opened at Dh222.75, Dh215.5 and Dh184.75 per gram, respectively.

Spot gold prices fell one per cent in the early trade, but recovered later and were trading flat at $1,985.

The yellow metal could see more volatility this week as several important announcements will be made including headline CPI.

“While there are several high-impact events to follow, the focal point will likely be on Tuesday's US consumer price index data and Wednesday's Fed monetary policy announcement. Focusing first on inflation, headline CPI is forecast to have flatlined in November, bringing the annual rate to 3.1 per cent from October’s 3.2 per cent,” said Diego Colman, contributing strategist at dailyFX.

He added that since mid-November, interest rate expectations have shifted lower, with traders discounting about 100 basis points of easing over the next 12 months.

“For this dovish outlook to be validated, CPI figures will have to show that the cost-of-living growth is rapidly converging to the 2.0 per cent target; failure to do so could trigger a hawkish repricing of the Fed’s path – a bearish outcome for precious metals and tech stocks,” he added.

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