Dubai: Gold price recovers, but still trades below $1,800

Gold price recovered on Wednesday morning after it fell below $1,800 an ounce on Tuesday.

But the precious metal was still trading below $1,800 an ounce at the opening of the market on Wednesday.

Spot gold rose 0.23 per cent to $1,794.56 per ounce at 9.20 am UAE time. The yellow metal had slipped below $1,800 on Tuesday afternoon.

In the UAE, 24K was trading at Dh217.25 per gram at the opening of the market on Wednesday morning, up one dirham from its yesterday’s close. Among the other variants of the precious metal, 22K opened at Dh204.25, 21K at Dh194.75, and 18K at Dh167.0 per gram.

Investors hope that the US Federal Reserve chairman Jerome Powell will step up the pace at which the central bank is normalising monetary policy to better grapple with surging inflation. The dollar index was steady and remained close to its highest in 16 months, raising bullion’s cost to buyers holding other currencies.

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Daniel McCarthy, strategist at Daily FX, said gold has been crushed in the last few sessions as the US dollar has strengthened across the board after US President Joe Biden re-nominated Powell as chairman of the Federal Reserve Bank. This saw US Treasury yields soar, sending the US dollar index to 16-month highs.

“Although Powell was the favourite for another term nomination, his alternative, Lael Brainard, was seen by the market as more dovish. With uncertainty around leadership at the Fed all but resolved, the focus returned to the pace of reducing monetary policy stimulus,” he said.

“For now, the outlook for gold appears to be beholden to US dollar direction. US dollar appears to be at the whim of US yields, which are being determined by the markets’ perception of the timeline of the Fed’s stimulus reduction,” he added.

-waheedabbas@khaleejtimes.com

• UAE