UAE: Gold prices rise due to Middle East tension, early Fed rate cut hopes

However, analyst believes that upward trend may be limited as Fed may not start lowering interest rates early this year as expected

by

Waheed Abbas

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Published: Mon 15 Jan 2024, 9:45 AM

Last updated: Tue 16 Jan 2024, 11:20 AM

Gold prices rose half a dirham at the opening of the markets in UAE on Monday morning.

The Dubai Jewellery Group data showed 24K trading at Dh248.75 per gram on the first trading day of the week as compared to Dh248.25 per gram at the close of the markets last week. While 22K, 21K and 18K also opened higher at Dh230.25, Dh223.0 and Dh191.25 per gram, respectively.

Spot gold was up 0.33 per cent at $2,054.02 per ounce at 9.17 am UAE time, after marking its biggest daily gain since December 12, 2023, on Friday, due to bullion holding onto safe-haven gains from elevated tensions in the Middle East and after renewed bets for an early rate cut by the US Federal Reserve.

Rania Gule, market analyst at XS.com, believes that the upward trend in yellow metal prices may be limited as Fed may not start lowering interest rates early this year as expected. “This could lead to some selling pressure on prices.”

She added that the increasing geopolitical tensions in the Middle East may lead investors towards the traditional haven, potentially raising the likelihood of a gold price increase in the short to medium term.

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