UAE: Gold prices steady after reaching record high

Gold prices rally took a breather in the UAE on Monday as prices were steady at the opening of the markets.

According to the Dubai Jewellery Group data, the 24K variant of the yellow metal was trading at Dh264.0 per gram. While 22K, 21K and 18K were also unchanged at Dh244.5, Dh236.5 and Dh202.75 per gram, respectively.

Spot gold was steady at $2,181.3 per ounce as of 9.10am UAE time.

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The precious metal prices reached a record peak of $2194.99 on Friday on the back of a cooling US labour market.

Amra Osman, sales director at XTB Mena, said the precious metal extended multi-day gains as traders saw some weakness in the dollar and as treasury yields continued to slide.

“US Federal Reserve chairman Jerome Powell’s comments have also supported expectations of interest rate cuts later this year. The latter could support the uptrend in gold prices as investors concerned about inflation could continue to flock to the asset,” said Osman.

Ole Hansen, head of commodities strategy at Saxo Bank, said the precious metal’s focus has shifted to consolidation after a record run.

“Last week, the gold market showed signs of strength, trading flat on the month despite seeing US Treasury yields shoot higher after US data strength earlier in the month, which further delayed the expected timing of the first and depth of subsequent US rate cuts,” he said.

“At the end of last year, we forecasted gold could reach $2,300 in 2024, so while the latest rally is in line with our general view on the direction of gold, we have been left surprised by the timing of the run-up to a fresh record. Given the need for rate cuts to attract ETF investors back into gold, we have been calling for patience regarding the timing of the next move,” he said.

“Overall, we maintain our $2,300 target, with the technical picture potentially pointing to an even higher level around $2,500,” added Hansen.

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