Dubai: Gold edges up, 24K trades at Dh215 per gram

Gold prices edged up on Thursday, recovering from a three-week low in the last session as investors took solace in the US Federal Reserve saying it would not rush into hiking interest rates even as it begins tapering its stimulus.

Spot gold rose 0.3 per cent to $1,775.00 per ounce on Thursday morning.

In the UAE, the 24K price rose by one dirham from Wednesday close to trade at Dh215.0 per gram on Thursday morning. While 22K, 21K and 18K were trading at Dh210.75, Dh192.5 and Dh165.0 per gram, respectively.

In a widely expected move, the Fed said it would start trimming its monthly asset purchases in November with plans to end them by mid-2022.

But the central bank signalled it would stay patient before raising interest rates as it held onto its belief that inflation would be "transitory" and awaited more signs of job growth.

"The Fed's push back against inflation leaves gold in a decent position, for now, to move higher until the Fed ultimately signals that 'we're not in transitory anymore and we're going to start hiking rates to defend against inflation'," Stephen Innes, managing partner at SPI Asset Management, told Reuters

"Given the Fed's view that inflation could persist until about mid-2022 and some signs from the labour market of full employment as evidenced by wage growth, it's not going to take much for the Fed to accelerate tapering, weighing on gold".

Investors are also looking forward to the Bank of England's policy decision at 1200 GMT (4 pm UAE time), where it could raise interest rates or at least signal that the economy is ready for one.

waheedabbas@khaleejtimes.com

• Dubai