Time to buy: Gold prices drop further in UAE

They are pulled down by a firmer US dollar, major central banks adopting an aggressive stance on interest rates to tame inflation

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A Staff Reporter

Published: Mon 26 Sep 2022, 9:34 AM

Gold prices were trading at near a 2-1/2-year low on Monday, pulled down by a firmer US dollar and major central banks adopting an aggressive stance on interest rates to tame inflation.

Spot gold was down 0.41 per cent at $1,637.35 per ounce, as of 9.25 am UAE time. Prices fell as much as one per cent earlier in the session to hit $1,626.41, their lowest level since April 2020.

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In the UAE, 24K gold price fell one dirham to Dh198.25 per gram at the opening of the markets on Monday. Similarly, 22K, 21K and 18K prices opened lower at Dh186.25, Dh177.75 and Dh152.25 per gram, respectively.

Vijay Valecha, chief investment officer at Century Financial, said gold failed last week to break the $1,684 resistance, higher US Treasury yields, and a stronger dollar prevented the yellow metal to recover.

"It's very difficult to construct a bullish case for gold, not until we see a pivot with the Fed, especially with (other) central banks tracing up with the Fed as well," City Index analyst Matt Simpson told Reuters.

He said when the recession becomes a reality, there's a chance there for gold to get its safe-haven status back as the Fed won't be hiking anymore.

The US central bank and a number of other major central banks raised interest rates last week, triggering concerns over its impact on growth.

Higher US interest rates dull the zero-yielding bullion's appeal while bolstering the dollar in which gold is priced.

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A Staff Reporter

Published: Mon 26 Sep 2022, 9:34 AM

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