UAE: Gold prices jump Dh2 per gram as Fed holds interest rates

Gold prices opened Dh2 per gram higher in the UAE on Thursday morning as the US Federal Reserve held the interest rates steady last night.

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The 24K variant of the yellow metal was trading at Dh280.75 per gram on Thursday morning as compared to last night’s close of Dh278.75 per gram. Among the other variants, 22K, 21K and 18K were trading higher at Dh260.0, Dh251.75 and Dh215.75 per gram, respectively.

Spot gold was trading at $2,315.53 per ounce at 9.17 am UAE time, down 0.37 per cent. The prices had slipped below $2,300 per ounce on Wednesday evening but recovered later in the day.

Mahmoud Alkudsi, senior market analyst at ADSS, said the Fed is still searching for confidence that inflation will soon be under control. “Given inflation retracted away from the 2 per cent target in March, the Fed’s plan is evidently to keep interest rates higher for longer until these signs become more apparent. The possibility of a rate hike this year has begun to emerge given the disappointment with recent inflation data. This was a once farfetched idea, and it contradicts previous expectations of up to 150 basis points worth of rate cuts from the end of Q1,” said AlKudsi.

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