UAE: Gold prices drop in Dubai in early trade

Gold prices fell in UAE at the opening of the markets on Wednesday morning.

The Dubai Jewellery Group data showed 24K trading 75 fils or Dh0.75 down at Dh246.0 per gram while 22K, 21K and 18K also opened lower at Dh227.75, Dh220.5 and Dh189.0 per gram, respectively.

Spot gold was down 0.10 per cent at $2,029.02 per ounce at 9.20am UAE time.

Gold prices recovered some lost ground during the early session on Tuesday morning.

“Concerns about the possibility of the US Federal Reserve maintaining a restrictive stance for an extended period could exert selling pressure on gold in the near term. Traders are awaiting fresh impetus from the US Consumer Price Index (CPI) on Thursday,” said Vijay Valecha, chief investment officer at Century Financial.

Diego Colman, a contributing strategist at dailyFX, said the yellow metal had a strong run in late 2023 but stumbled at the onset of the new year, with traders increasingly reluctant to take additional bullish positions on concerns that the Federal Reserve’s aggressive easing discounted for the next 12 months will not come to fruition.

“While the US central bank pivoted to a more cautious stance at its December meeting and signalled that it would lower borrowing costs in 2024, the market may have gotten ahead of itself by pricing in too many cuts for an economy that continues to display strength and is experiencing above-target inflation,” said Colman.

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