Dubai: Gold price drops Dh1 per gram; 24K trades at Dh215.5

Dubai - Spot gold fell 0.48 per cent to $1,778.88 per ounce by 9.20 am UAE time.

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By Staff Report

Published: Thu 19 Aug 2021, 9:34 AM

Last updated: Thu 19 Aug 2021, 9:45 AM

Gold prices fell on Thursday as the dollar strengthened after the US Federal Reserve's policy meeting minutes showed that its officials were largely on board to start easing bond purchases this year.

Spot gold fell 0.48 per cent to $1,778.88 per ounce by 9.20 am UAE time.

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In the UAE, precious metal prices fell one dirham per gram at the opening of the market on Thursday.

The Dubai Gold and Jewellery Group data showed 24K trading at Dh215.5 per gram, 22K at Dh202.5, 21K at Dh193.25 and 18K at Dh163.5 on Thursday morning.

"Gold lost a little bit of upside momentum as market participants increasingly grew wary of the risk that the Fed could start tapering its bond buying by the end of the year," IG Market analyst Kyle Rodda told Reuters.

Over the next few days, gold's price action would be determined by the speculation relating to Fed tapering and what they might say about tapering at Jackson Hole symposium, Rodda added.

Ipek Ozkardeskaya, senior analyst at Swissquote, said gold, which remained mostly unresponsive to rising inflation expectations and low yields, could get a breath of fresh air in case of a market turmoil.

“But for now, the equity space remains the major money-maker, and gold continues seeing a decent resistance near the $1,800 area. I expect gold to remain under pressure as long as the equity markets drive north. Buying gold as a bad-day hedge is good, but costly in a market where equities post abnormally high returns and banks call for further gains,” he said.

The minutes from the July meeting showed US central bank policymakers saw the potential to ease the bond-buying programme this year if the economy continues to improve as expected.

However, the minutes also magnified the importance of the next few months' jobs reports, with solid gains needed to meet the Fed's expectations and show that the coronavirus has not begun to again slow the economy.

Gold had slumped to a more than four-month low of $1,684.37, following a robust July nonfarm payrolls data.

Gold is "still short of recapturing the key $1,800 level that would be prerequisite to the yellow metal regaining some bullish shine," Avtar Sandu, senior commodities manager at Phillip Futures, said in a note.

waheedabbas@khaleejtimes.com

Staff Report

Published: Thu 19 Aug 2021, 9:34 AM

Last updated: Thu 19 Aug 2021, 9:45 AM

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