Dubai: Gold prices edged up; 24K opens at Dh217

Hawkish Fed, rising Covid cases may push yellow metal higher.


Waheed Abbas

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Agencies file
Agencies file

Published: Thu 25 Nov 2021, 9:54 AM

Gold prices edged up as the US dollar eased slightly on Thursday morning.

Spot gold rose 0.16 per cent to $1,792.41 per ounce by 9.30 am UAE time.

In the UAE, 24K rose Dh0.75 per gram from Wednesday’s close to Dh217.0 on Thursday morning. While 22K, 21K and 18K opened at Dh204.0, Dh194.5 and Dh166.75 per gram, respectively.

The dollar index edged 0.1 per cent lower off its highest in 16 months hit on Wednesday, reducing the metal's cost to buyers holding other currencies.

Comments from US Federal Reserve policymakers suggest that the central bank could accelerate stimulus tapering weighed on the yellow metal and kept it well below the key $1,800 mark.

Naeem Aslam, chief market analyst at AVA Trade, said to counter record high inflation, investors expect that the US Federal Reserve will likely move to a more contractionary monetary policy, meaning a likely surge in interest rates is not too far away.

“A rise in interest rates increases the opportunity cost of holding the precious metal and makes holding gold less appealing to investors. However, investors should keep in mind that despite a hawkish Fed, inflation is still rising and the coronavirus continuing to spread, meaning gold prices could jump moving forward,” he said.

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