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Dubai gold prices drop; 24K trades at Dh225.25 per gram

Dubai - Markets await US Federal Reserve meeting outcome

Gold prices in Dubai fell on Wednesday morning ahead of the US Federal Reserve meeting.

Data from The Dubai Gold and Jewellery Group showed the price of 24K of the yellow precious metal falling from Dh226 on Tuesday (June 15) morning to Dh225.25 on Wednesday (June 16) morning.

Among the other variants of the precious metal, 22K price dropped from Dh212.25 per gram to Dh211.5; while 21K fell from Dh202.5 to Dh201.75; and 18K price declined to Dh173 per gram at the opening of the trade on Wednesday morning.

Globally, spot gold price was slightly up 0.13 per cent at $1,860.19 per ounce at 9.30am UAE time.

The US Federal Reserve officials are expected to flag the start of talks on Wednesday about when and how to exit from the crisis-era policies the US central bank put in place at the onset of the Covid-19 pandemic last year.

With US inflation rising faster-than-expected and the economy forecast to grow at its quickest pace in decades this year, some policymakers have begun questioning whether the Fed should continue to keep its benchmark short-term interest rate near zero and leave unchanged a massive bond-buying programme put in place to stem the economic fallout from the pandemic.

Naeem Aslam, chief market analyst at AVATrade, said the rally within the US bond market lost steam, anticipating the outcome of the Fed’s meeting schedule to be held this week.

“As a result, gold has slumped to its lowest point over the last 30 days. The decline in interest rates and the provision of economic stimulus have supported the rise in prices of precious metals over the last twelve months. However, stock traders are concerned that rising inflation and the economic recovery are likely to convince the Fed to withdraw its support,” Aslam added.

-waheedabbas@khaleejtimes.com