UAE: Gold prices drop in Dubai as investors eye US debt ceiling talks

Keeping gold under pressure, St. Louis Fed President James Bullard said there might be the need to go higher on the policy rate

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A Staff Reporter

Published: Tue 23 May 2023, 10:17 AM

Gold prices fell in the UAE and globally on Tuesday, weighed down by a stronger dollar and hawkish remarks by some Federal Reserve members, while investors kept their eyes peeled on the US debt ceiling saga.

Spot gold shed 0.47 per cent to $1,960.47 per ounce by 9.45 am UAE time.

In the UAE, 24K was trading at Dh238.0 per gram at the opening of the markets on Tuesday, down Dh0.75 per gram from last night’s close of the markets. Meanwhile, 22K, 21K and 18K were trading at Dh220.25, Dh213.25 and Dh182.75 per gram, respectively.

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"The market typically gets fatigued of debt ceiling posturing. While initial uncertainty helps gold, the strengthening dollar indicates the market believes a compromise will be reached," Michael Langford, director at corporate advisory firm AirGuide, told Reuters.

US President Joe Biden and House Speaker Kevin McCarthy could not reach an agreement on Monday on how to raise the US government's $31.4 trillion debt ceiling with just 10 days before a possible default that could sink the economy, but pledged to keep talking.

Keeping gold under pressure, St. Louis Fed President James Bullard said there might be the need to go higher on the policy rate. Rising rates hurt demand for the zero-yielding asset.

However, AirGuide's Langford said key risks for gold appear to be reducing as Fed Chairman Jerome Powell signalled that it may be time to pause rate rises.

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A Staff Reporter

Published: Tue 23 May 2023, 10:17 AM

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