UAE: Gold prices in Dubai gain Dh1 per gram in early trade

Gold prices rose in the UAE on Tuesday morning in line with the global rates as traders await key US inflation data and the Federal Reserve’s decision on interest rates.

The precious metal prices in the UAE jumped one dirham per gram at the opening of the markets on Tuesday with 24K trading at Dh237.5 per gram. The other variants of the precious metal also opened higher. According to Dubai Jewellery Group data, 22K, 21K and 18K opened at Dh219.75, Dh212.75 and Dh182.5 per gram, respectively.

Globally, spot gold was trading at $1,960.97 per ounce, up slightly by 0.04 per cent at 9.15 am UAE time.

Vijay Valecha, chief investment officer, Century Financial, said investors are awaiting the release of the US Consumer Price Index numbers which will help investors to gauge the strength of price levels.

“A strong print will alter rate hikes expectations and can prompt the Federal Reserve to increase rates once again this month. Fed fund futures show a 73.6 per cent probability that the US central bank will keep its benchmark overnight interest rate in the 5.00-5.25 per cent range when its two-day meeting ends on Wednesday. Market participants are expecting the Federal Reserve to keep rates elevated and have priced in a 25-basis point hike during the July Meeting. Increased rates hikes can add downward pressure on the non-yielding metal,” said Valecha.

On the technical front, he said, gold prices are range bound between $1,938 and $1,976. “A break above $1,985 can fuel bullish momentum towards $1,991 followed by $2,000 and $2,015. On the downside, a break below $1,930 can instil corrections towards $1,912 followed by $1,890.”

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