UAE: Gold prices drop in early trade as investors await clarity on interest rates

Spot gold was down 0.28 per cent at $2,048.63 per ounce by 9.23 am UAE time

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by

Waheed Abbas

Published: Tue 16 Jan 2024, 9:47 AM

Last updated: Tue 16 Jan 2024, 11:12 AM

Gold prices fell by half a dirham per gram in the UAE on Tuesday morning.

According to the Dubai Jewellery Group data, the 24K variant of the yellow metal was trading at Dh248.25 per gram as compared to last night’s close of Dh248.75 per gram. While 22K, 21K and 18K were trading lower at Dh229.75, Dh222.5 and Dh190.75 per gram, respectively.

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Spot gold was down 0.28 per cent at $2,048.63 per ounce by 9.23 am UAE time as the US dollar and Treasury yields jumped, with investors awaiting comments from a host of Federal Reserve speakers this week for more clarity on the central bank's interest rate trajectory.

Gold prices surged for the third consecutive day on Monday, reaching $2,055 an ounce, driven by heightened geopolitical tensions in the Middle East, amplified by concerns over the Israel-Gaza conflict and the Red Sea missile incident involving Iran-led Houthis targeting the US ships.

“Gold, a traditional safe-haven asset, has seen increased demand during geopolitical uncertainty. Additionally, Barclays' revised forecast for the first Federal Reserve rate cut, now anticipated in March instead of June, has shifted market sentiment toward expectations of monetary easing, impacting the US dollar,” he said.

Technically, he said the metal has edged above its resistance area of $2,045 (21-day SMA) which will now act as immediate support for the metal followed by the $2,025-30 region. “On the upside, the $2,075-85 region is seen as a strong resistance area, breaking above which will open doors to the $2,100 level,” he added.

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Waheed Abbas

Published: Tue 16 Jan 2024, 9:47 AM

Last updated: Tue 16 Jan 2024, 11:12 AM

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