UAE: Gold prices in Dubai drop over Dh3 per gram, hits nearly 4-week low

Investors looked towards a US Federal Reserve Policy decision that could offer for more cues regarding its interest rate cuts policy

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by

Waheed Abbas

Published: Wed 1 May 2024, 9:52 AM

Last updated: Thu 27 Jun 2024, 2:28 PM

Gold prices in the UAE saw a big drop at the opening of the markets on Wednesday, dropping over Dh3 per gram to trade at a nearly four-week low.

The Dubai Jewellery Group data showed 24K trading at Dh276.5 per gram on Wednesday morning as compared to last night’s close of Dh279.75 per gram, down by Dh3.25 per gram. Among the other variants of the yellow metal, 22K opened lower at Dh256.0, 21K at Dh247.75 and 18K at Dh212.25 per gram.

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Spot gold was trading at $2,286.3 per ounce on Wednesday morning, down 0.19 per cent at 9.15 am UAE time as investors looked towards a US Federal Reserve Policy decision that could offer for more cues regarding its interest rate cuts policy.

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Analysts see changes in interest rates can impact the price of gold as higher interest rates tend to make non-interest-bearing assets like gold less attractive to investors, leading to potential price declines.

Rick Kanda, managing director at The Gold Bullion Company said gold prices could dip for various reasons.

“A stronger US dollar and British pound, improved economic conditions, and reduced geopolitical tensions often lead investors to seek riskier assets, diminishing demand for gold. Additionally, if inflation expectations decrease or central banks signal reduced interest in gold reserves, prices may decline. It's essential for investors to monitor these factors closely to navigate the gold market effectively," said Kanda.

“Since gold is traded globally in US dollars, monitoring the GBP/USD exchange rate is crucial. A strengthening British pound against the US dollar can lead to lower gold prices in British pounds, as it becomes more expensive to purchase gold in British pound terms,” said The Gold Bullion Company.

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Waheed Abbas

Published: Wed 1 May 2024, 9:52 AM

Last updated: Thu 27 Jun 2024, 2:28 PM

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