UAE: Gold prices plunge after Fed hints at aggressive rate hikes

Rates fall one-and-a-half dirham per gram at the opening of the markets

A Staff Reporter

Published: Wed 3 Aug 2022, 9:34 AM

Last updated: Wed 3 Aug 2022, 9:50 AM

Gold prices slipped on Wednesday as the dollar and US Treasury yields advanced after hawkish comments from Federal Reserve officials hinted at continuing aggressive interest rate hikes in the near term.

Spot gold was down 0.2 per cent at $1,757.08 per ounce.

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In the UAE, 24K gold price fell one-and-a-half dirham per gram at the opening of the markets on Wednesday.

The Dubai Gold and Jewellery Group data showed 24K trading at Dh214.25 per gram on Wednesday as compared to Dh215.75 per gram at the close of the markets on Tuesday. While 22K, 21K and 18K opened lower at Dh201.25, Dh192.0 and Dh164.75 per gram, respectively.

The dollar was up 0.1 per cent against its rivals after rising 0.8 per cent overnight, making greenback-denominated gold more expensive for other currency holders.

Edward Moya, senior market analyst, Oanda, said gold pared gains after Wall Street became optimistic that tensions between the world’s two largest economies would get out of hand.

“A strong dollar is also weighing on gold as the greenback's pullback over the past couple of weeks appears to be over. Gold may struggle to do much of anything above the $1,800 level as the king dollar appears to be back.

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The US dollar got a major boost as the latest round of Fed speak supports the idea that the interest rate differential will widely remain in the dollar’s favour,” he said.

Moya added that geopolitical jitters could also draw safe-haven flows mainly into Treasuries and that will support the dollar.

- waheedabbas@khaleejtimes.com