UAE: Gold prices drop Dh2 per gram after hitting record high

Gold prices fell over Dh2 per gram in the UAE at the opening of the markets on Friday.

The 24K variant of the yellow metal was trading at Dh263 per gram on Friday morning as compared to Dh265.25 at the close of the markets on Thursday, according to Dubai Jewellery Group data.

Similarly, 22K, 21K and 18K opened lower at Dh243.50, Dh235.75 and Dh202 per gram, respectively.

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Gold prices shot up Dh5 per gram at the opening of the markets on Wednesday after the US Federal Reserve left the interest rates unchanged, resulting in a weakening of the US dollar.

But the dollar recovered on Friday, pushing safe-haven metal down. Spot gold was down 0.41 per cent at $2,172.78 per ounce on Friday morning.

Ipek Ozkardeskaya, senior analyst at Swissquote Bank, said gold retreated after hitting a fresh all-time high posterior to the Fed decision.

Daniel Takieddine, CEO of the Mena region at BDSwiss, said central bank demand for gold could continue to support its performance. “Central banks have sustained successive months of net purchases and could continue to drive demand for gold over the medium term ahead of the interest rate cut cycle.”

However, in India, one of the world’s major consumers of gold for jewellery, he said the current rally in gold prices may face near-term resistance as demand slows.

“Record high prices have limited demand for gold jewellery, with reports indicating a widespread decrease in rural and urban centres despite the ongoing wedding season. Consumers and jewellers are holding off purchases, awaiting a potential price correction,” he said.

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