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UAE: Gold prices slip in Dubai as precious metal drops below $2,000 per ounce

Although gold is a hedge against inflation, he said, an increase in interest rates by the US Fed could lessen its appeal

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Photo: AP
by

Waheed Abbas

Published: Tue 31 Oct 2023, 10:06 AM

Gold prices slipped in the UAE at the opening of the markets on Tuesday, falling half a dirham per gram.

The 24K variant of the precious metal was trading at Dh241.5 per gram on Tuesday morning as compared to last night’s close of Dh242.0 per gram. While 22K, 21K and 18K also opened lower at Dh223.5, Dh216.5 and Dh185.5 per gram, respectively, according to Dubai Jewellery Group data.

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Globally, spot gold was steady at $1,994.67 per ounce by 9.20am UAE time. It slipped below the critical $2,000 milestone on Tuesday, as investors prepared for central bank meetings with a particular focus on the US Federal Reserve's policy outlook.

Vijay Valecha, chief investment officer, Century Financial, said after breaking through the $2,000 barrier on Friday, gold prices slightly declined but they nevertheless held onto their most recent gains as a result of the geopolitical tension in the Middle East, which ultimately served to boost the safe haven.

Although gold is a hedge against inflation, he said, an increase in interest rates by the US Fed could lessen its appeal.

According to CME's Fed Watch Tool, market players are currently pricing a 96.1 per cent chance that the interest rate will stay at current levels.

“Technically speaking, the price of gold is trading close to the $2,000/ounce mark and is still moving inside the bullish channel, this suggests that the bullish trend will continue, and we will likely reach our next major target at $2,020. As a result, the bullish trend scenario will continue to be active, and it may be preceded by a brief period of sideways fluctuation influenced by current stochastic negativity.

“As a reminder, breaking above the target could push the price to 2040, which would be the major resistance. Holding above $1,982 is essential to the expected rise continuing,” he added.

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Waheed Abbas

Published: Tue 31 Oct 2023, 10:06 AM

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