UAE: Gold prices drop Dh3 per gram, likely to fall further in the coming week

The precious metal closed at Dh232.5 per gram on Friday, down from Dh235.5 per gram at the opening of the markets on Monday

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Photo: AP
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Waheed Abbas

Published: Sat 9 Sep 2023, 9:55 AM

Gold prices fell three dirhams per gram in the UAE this week and it is expected that the yellow metal will remain under pressure in the coming weeks due to high US treasuries yields in the short term.

The precious metal closed at Dh232.5 per gram on Friday, down from Dh235.5 per gram at the opening of the markets on Monday. While 22K, 21K and 18K ended lower at Dh215.25, Dh208.25 and Dh178.5 per gram, respectively.

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Spot gold closed at $1,919.14 per gram on Friday, down from $1,945.47 at the start of the week.

Bas Kooijman, CEO and asset manager of DHF Capital, said gold prices could continue to see a decline as traders take US economic data into account as well as the changing expectations around US monetary policy.

“Gold has been dropping since the 1st of September’s high where it hit almost $1,953. While the solid US economic resilience has been weighing on the commodity, economic data elsewhere could fuel some volatility as Europe and China continue to miss estimates,” added Kooijman.

“US data on the non-manufacturing sector and the job market could support the expectations of interest rates remaining at high levels for longer, which could continue to pull gold prices to the downside potentially into next year as well,” he added.

In the day ahead, investors and traders will remain focused on the new data ahead of the Federal Reserve’s meeting later this month for clues on the probability of another interest rate hike this year.

“Gold prices could see some volatility next week in particular if inflation and job market data create a surprise. Gold could also see pressures as the US dollar continues to extend its gains since the middle of July. At the same time, yields on short-term US treasuries remained elevated while yields on their longer-term equivalents continued to rise, drawing investors away from gold,” added the Dubai-based analyst Kooijman.

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Waheed Abbas

Published: Sat 9 Sep 2023, 9:55 AM

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