UAE: Time to buy? Gold prices slip during early trade

Spot gold was up at $2,393.29 per ounce, up 0.35 per cent at 9.15am

Waheed Abbas

Published: Thu 8 Aug 2024, 9:40 AM

Gold prices slipped in Dubai at the opening of the markets on Thursday.

According to Dubai Jewellery Group data, a 24K variant of the yellow metal was selling for Dh290 per gram, down half a dirham per gram from last night’s close. Meanwhile, 22K, 21K and 18K were selling at Dh268.5, Dh260 and Dh222.75 per gram, respectively, at the opening of the markets.

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Spot gold was up at $2,393.29 per ounce, up 0.35 per cent at 9.15am local time.

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Chris Weston, head of research at Pepperstone, said it's been a confusing few days for those involved in the gold market and as yellow metal is trapped between $2,480 and $2,353.

“With so many in the market having subscribed to a US hard landing thesis, and a synchronised global growth slowdown, amid ongoing geopolitical tensions, one could have made a clear case for gold to be above $2,500 in this dynamic. What has transpired though is gold being caught up in a broad liquidation of well-owned positions, where the classic fundamental case for gold was tossed aside, with market participants selling almost everything, and buying bonds,” he said.

Weston added that with calmer heads now prevailing, there are now increased flows into gold ETFs, and gold buyers supporting the 50-day moving average.

“However, with the Japanese yen finding sellers and various recently beaten-up equity indices finding a better tone, there is a clear hesitancy to really go after gold upside here. Traders remain cognisant of the risk of a further liquidation in risk assets if the data does indeed come in weaker from here, validating those calling for a US recession.

“However, with US real rates likely to move lower should that play out, one could then argue that this time around gold could find a better bid as a recession hedge – perhaps the difference this time around is that the yen seems arguably the better portfolio hedge and this should therefore limit the upside in the near-term until clarity resumes,” he added.

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