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UAE: Gold prices jump after interest rate hikes by central banks

Spot gold was up 0.2 per cent at $1,736.89 per ounce in early trade

Published: Thu 28 Jul 2022, 9:45 AM

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Gold prices extended gains on Thursday, as the US dollar and Treasury yields fell after the Federal Reserve raised interest rates by 75 basis points as expected and its chairman sounded less hawkish on future hikes.

Spot gold was up 0.2 per cent at $1,736.89 per ounce in early trade.

In the UAE, the 24K gold price jumped Dh2.5 at the opening of the markets on Thursday to trade at Dh210.25 per gram as compared to Wednesday’s close of DhDh207.75. While 22K, 21K and 18K were trading at Dh197.5 per gram, Dh188.5 and Dh161.5, respectively.

The US central bank late on Wednesday raised rates by three-quarters of a percentage point for the second straight meeting to combat soaring inflation. The UAE and other Gulf countries also increased rates in line with the Fed’s decision to cool inflation.

Fed Chair Jerome Powell said another "unusually large" increase in interest rates may be appropriate at the September meeting, but the decision will be determined by the incoming economic data and it would not give forward guidance.

Jeffrey Halley Senior Market Analyst, Asia Pacific, Oanda, said gold needs to overcome heavy resistance at the $1,745 an ounce triple top before the gold bugs can really start to get excited. ​

“It has support at $1,700.00 and $1,680.00, and then the longer-term support around $1,675.00 an ounce zone. A sustained failure of $1,675.00 will signal a much deeper move lower targeting the $1,450.00 to $1,500.00 an ounce regions,” he said.

waheedabbas@khaleejtimes.com

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