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UAE: Gold prices drop after big jump last session

Globally, the precious metal was trading at $2,414.41 per ounce, down by 0.5 per cent this morning

Published: Tue 21 May 2024, 9:41 AM

Updated: Tue 21 May 2024, 9:50 AM

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Display of gold ornaments at a jewellery shop in Deira Gold Souq. KT Photo: Shihab

Display of gold ornaments at a jewellery shop in Deira Gold Souq. KT Photo: Shihab

Gold prices dropped by Dh0.75 per gram at the opening of the markets on Tuesday (May 21), after making a big jump in the previous session.

At 9am UAE time, the 24K variant of the yellow was trading at Dh292.25 per gram, down from Dh293.0 per gram at the close of the markets on Monday.

Among the other variants, 22K, 21K and 18K were selling at Dh270.5, Dh261.75 and Dh224.5 per gram, respectively.

The 24K variant hit Dh296 per gram on Monday afternoon.

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Globally, the gold was trading at $2,414.41 per ounce, down by 0.5 per cent, at 9.10 am UAE time.

Diego Colman, contributing strategist at dailyFX said that encouraging data on the US inflation front fuelled speculation that the Federal Reserve might ease its monetary policy sooner than anticipated, lifting precious metals, with gold nearing its all-time high.

According to Julius Baer, the narrative of central banks switching from US Treasuries to gold has been fuelling the recent gold price rally. “However, gold’s record-breaking rally seems to have run out of steam, at least for now. Impacting both central banks and investors alike,” it said.

The Swiss bank’s analysts said that global gold demand has not grown during the past decade. Rather gold’s record-breaking rally can be explained by an increase in buyers’ willingness to pay.

“All gold-buying central banks increased their holdings of US Treasuries since 2022, except China and Russia who increased gold purchases. Gold remains a hedge against economic and systemic risks in financial markets, such as a further weaponisation of the US dollar,” the analysts said.

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