Dubai: Gold prices drop ahead of Fed meeting on interest rates

Gold prices fell on Wednesday morning as some investors stayed on the sidelines ahead of the US Federal Reserve's interest rate decision and policy outlook.

Spot gold was down 0.2 per cent at $1,939.01 per ounce as of 9.12 am UAE time.

The precious metal prices fell in Dubai as well on Wednesday.

According to Dubai Jewellery Group data, the 24K was trading at Dh234.75 per gram at the opening of markets on Wednesday, down from Dh236.50 per gram when the markets closed on Tuesday.

Other variants of the precious metal also opened lower. The 22K was trading at Dh217.5, 21K at Dh210.50 and 18K at Dh180.5.

“Market developments remain fluid but as it stands, it does appear that banking sector wounds are showing tentative signs of recovery after the emergency backstops and assurances from authorities ... gold has eased lower as safe-haven demand dissipates,” said Christopher Wong, forex strategist at OCBC.

Gold recently rallied as much as 10 per cent, or by about $180, to a one-year high on safe-haven demand after the collapse of US-based Silicon Valley Bank and a crisis at lender Credit Suisse. But prices retreated after the rescue of Credit Suisse whetted risk appetite, although financial system uncertainties remained.

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