Yellow Metal Loses Dh2.5 Since Monday Amid US Federal Reserve Rate Expectations
Gold prices in Dubai saw another dip on Wednesday morning, marking the second consecutive day of decline following a record peak earlier this week. As of 9am, the 24K gold variant was trading at Dh311 per gram, down by Dh0.75 from Tuesday night’s close. Other popular variants also opened lower, with 22K trading at Dh288, 21K at Dh278.75, and 18K at Dh239 per gram.
The drop comes after gold surged to an all-time high on Monday, when 24K reached Dh313.5 per gram. Since then, prices have lost Dh2.5 per gram as markets react to global economic developments, particularly the anticipated interest rate decisions by the US Federal Reserve.
Globally, spot gold was trading at $2,568.49 per ounce, down 0.21 percent as of 9:10am. Analysts point to the US Federal Reserve’s interest rate policies as a key factor influencing gold prices. The yellow metal initially rallied due to a weaker dollar and speculation that the Fed would ease monetary policy aggressively.
Marc Pussard, head of risk at APM Capital, noted that gold’s record surge on Monday was driven by these factors, which boosted bullion’s appeal as a non-yielding asset. Meanwhile, Chris Weston, head of research at Pepperstone, added that investors are closely watching the Fed’s next move, with some positioned for a potential break above $2,600 per ounce.
Weston explained that a significant rate cut, combined with a more cautious economic outlook, could push gold prices higher as US Treasury yields decline. However, he cautioned that if equity markets falter, even a supportive environment for gold could lead to broader market de-risking, pulling gold prices down alongside other assets.
Looking ahead, Weston believes a smaller 25-basis-point cut might still benefit gold, particularly if the Fed signals a readiness for bolder action in upcoming meetings, provided the economic data justifies it.
As the gold market remains volatile, traders and consumers in Dubai will be closely monitoring global developments for further pricing trends, particularly in light of ongoing economic uncertainty.
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