Dubai: Gold gains; 24K opens slightly higher at Dh216.5 per gram

Gold price inched higher on Monday morning as elevated US consumer prices lifted its appeal as an inflation hedge, while investors awaited a flurry of central bank meetings this week, including by the US Federal Reserve, for further direction.

Spot gold rose 0.2 per cent to $1,786.73 per ounce at 9.10 am UAE time.

In the UAE, gold prices rose in line with the global rates. The Dubai Gold and Jewellery Group data showed 24K opening at Dh216.5 per gram on Monday morning as against Dh216.0 close on Friday. Among the other variants of the yellow metal, 22K opened at Dh203.25 per gram, 21K at Dh194.0 and 18K at Dh166.25.

The US Federal Reserve is widely expected to signal a faster tapering of asset buying this week, and thus an earlier start to rate hikes.

Analysts said the yellow price action continues to disappoint, unable to rally on either a weaker or stronger US dollar, heightened or lessened risk sentiment, or higher or lower US yields.

Naeem Aslam, chief market analyst at AVA Trade, has said that the US Treasury yields are continuing their upward trajectory as Omicron is likely to have little impact on the American economy and the Federal Reserve will be moving on with its plan to speed up its pace of tapering, which will mean a quicker rise in interest rates starting next year. When interest rates jump, the opportunity cost of holding the yellow metal rises and hence makes gold less appealing for investors to hold.

waheedabbas@khaleejtimes.com

• Dubai