UAE: Gold sinks Dh3.75 per gram on resilient US economy, weak dollar

Gold price tumbled on Thursday as the US economy turned out more resilient in the second quarter than expected..

Also, the Fed’s less-thank-hawkish guidance put pressure on the US dollar, resulting in a weakening in dollar-denominated commodities.

The uptick in US Treasury yields are hitting the precious metal hard, sending it through a recent level of short-term support at $1,960/oz.

In the UAE, the rate for 24K gold fell to Dh235.5 per gram from Dh239.25 per gram on Thursday morning. The price of one gram of 22K gold, which is the standard for gold jewellery, also fell from Dh221.50 in the morning to Dh218 in the evening.

The US Dollar Index is going through tough times as investors hope that the United States central bank has put the last nail in the coffin, according to FXStreet. Markets see the interest-rate hike in July as the last one in the current aggressive policy tightening spell, and expect that the Fed will keep rates steady ahead. Adding to that, receded fears of a recession in the United States acts as the cherry on the cake for US Dollar bears.

Analysts slightly lowered their gold forecasts for this year on the grounds zero-yield bullion would need a catalyst for another run to all-time highs, such as an interest rate cut from the Federal Reserve, a Reuters poll showed on Thursday.

The poll of 36 analysts and traders conducted through July returned median forecasts for gold at $1,950 an ounce in the third quarter of this year, $1,995 in the fourth, $1,944.5 for the full year and $1,988 in 2024.

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