UAE: Gold prices inch higher in early trade after falling Dh1.5 per gram earlier

Yellow metal rates will come down given the Fed's cautious approach

Waheed Abbas

Published: Tue 18 Jun 2024, 9:36 AM

Gold prices increased at the markets' opening on Tuesday after falling Dh1.5 per gram in the previous session.

According to Dubai Jewellery Group data, the 24K variant of the yellow metal was trading at Dh281.25 per gram, up from Dh281.0 per gram at the close of the markets on Monday. It fell Dh1.5 per gram in yesterday's session.

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Among the other variants, the 22K, 21K and 18K were trading at Dh260.5, Dh252.0 and Dh216.0 per gram, respectively.

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Globally, gold was steady at $2,321.68 per ounce at 9.10 am UAE time.

The yellow metal fell on Monday as investors looked forward to US economic data and Federal Reserve officials for clarity on the rate cut timeline.

Saqib Iqbal, a financial analyst at Trading.biz, said gold prices will come down given the Fed's cautious approach.

"We saw Fed chief J. Powell articulately did not give any hints on the rate cut. I see prices ranging from $2,250 to $2,300 in the coming month. If we do get consistent, softer CPI reports and the unemployment rate edging higher, it'll allow the Feds to cut rates in September. Only then can gold prices rise beyond $2,400," said Iqbal.

"There's another side to the Gold bearishness as well. Having bought gold reserves for 18 months, China halted buying gold in May after gold reached a record high. China's yearning for gold began to fade in April when the People's Bank of China purchased just 60,000 troy ounces — as opposed to 390,000 ounces in February and 160,000 ounces in March. The record-breaking gold rise may temporarily dampen demand," he added.

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