UAE: Gold prices drop, further Fed rate hike expectations weigh on yellow metal

Gold prices slipped on Monday, weighed down by a rebound in the US dollar and expectations of further interest rate hikes from the Federal Reserve to tame high inflation.

Spot gold was down 0.3 per cent at $1,793.84 per ounce at 9.15am UAE time.

In the UAE, the precious metal prices fell one dirham per gram at the opening of the markets on the first trading day of the week.

The Dubai Gold and Jewellery Group data showed 24K trading at Dh217.5 per gram, down by one dirham as compared to its previous close. While 22K, 21K and 18K also opened lower at Dh204.25 per gram, Dh195.0 and Dh167.0, respectively.

Gold ended last week above the $1,800 mark, capping a fourth weekly gain, the longest winning streak in almost a year, as cooling inflation in the US suggested rate hikes might not be as aggressive as anticipated.

“Market participants will look for fresh clues regarding the size of the US central bank’s next rate increase. Next resistance for the metal is seen near $1,840 and support near $1,780 and $1,750. In the UAE, 24K gold price will likely trade between Dh212 and Dh 225 this week,” said Vijay Valecha, chief investment officer at Century Financial.

• Fed officials say more rate hikes needed, despite slowing inflation