Dubai: Gold prices rise in early trade

Globally, spot gold was trading at $2,620.73, up 0.34 per cent

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by

Waheed Abbas

Published: Tue 24 Dec 2024, 9:26 AM

Gold prices opened half a dirham per gram higher in Dubai in early trade on Tuesday.

At 9am, the 24K variant rose to Dh317.25 per gram, up from Dh316.25 per gram at the close of the markets on Monday. Similarly, 22K, 21K and 18K opened higher at Dh293.75, Dh284.5 and Dh243.75 per gram, respectively.

Globally, spot gold was trading at $2,620.73, up 0.34 per cent.

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Gold resumed its decline on Monday after two days of recovery last week.

The precious metal declined as the US dollar and Treasury yields resumed their gains after the correction they suffered last Friday.

“This pressure comes mainly from the escalation of concerns about the slow pace of interest rate cuts next year by the Federal Reserve. These concerns are not new and have surfaced since Donald Trump was announced as the winner of a second term in the White House, as his policies may threaten to revive inflation again,” said Samer Hasn, a senior market analyst at XS.com.

Despite these expectations regarding inflation and interest rates, the US economy continues to show resilience and generally adapt to higher rates. The US economy managed to grow by 3.1 per cent in the fourth quarter, which beat expectations, and service sector growth accelerated more than expected, in addition to better-than-expected figures for building permits and existing home sales.

“While continued and accelerating US economic growth could also add to the pressure on gold, as it dispels the uncertainty caused by tighter monetary conditions – the economy is adaptive,” said Hasn.

On the geopolitical side of the Middle East in particular, Hasn believes that this factor will gradually take on a diminishing role, which will cause the premium that gold has gained to be removed.

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Waheed Abbas

Published: Tue 24 Dec 2024, 9:26 AM

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