Dubai: Gold prices recover after big drop on Monday

In the UAE, 24K opened higher at Dh242.25 per gram on Tuesday, as compared to its previous night’s close of Dh241.0

A Staff Reporter

Published: Tue 11 Apr 2023, 9:36 AM

Gold prices rose on Tuesday after falling over one per cent in the previous session, as the dollar eased while investors awaited this week's US inflation data that could influence the Federal Reserve's monetary policy trajectory.

Spot gold was up 0.42 per cent at $2,000.86 per ounce as of 9.20 am UAE time.

In the UAE, the 24K gold price opened higher at Dh242.25 per gram on Tuesday as compared to its previous night’s close of Dh241.0. While 22K, 21K and 18K opened at Dh224.25, Dh217.0 and Dh186.0 per gram, respectively.

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Traders are now focusing on the US consumer price data due Wednesday for more clarity on the path of rates heading into the Fed's May policy meeting.

"A hotter-than-expected print may suggest that the Fed could still hike rates once more in May... gold's rally higher has been somewhat excessive... chances of another Fed hike could kind of bring the overshoot down," said Christopher Wong, strategist, OCBC FX.

A US employment report released on Friday pointed to a tight labour market and raised bets of an interest rate hike by the US central bank next month. Markets are pricing in a 71 per cent chance of a 25 basis-point hike, according to the CME FedWatch tool.

"Near-term, there are also bearish technical setups for a corrective move lower" in gold prices, OCBC's Wong added.

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