Gold prices languished near a one-month low on Wednesday morning and were set for a fifth consecutive monthly drop, as solid US data and hawkish Federal Reserve comments pointing to aggressive interest rates dented the non-yielding metal's appeal.
Spot gold was flat at $1,725.6 per ounce.
In the UAE, the 24K gold price opened one dirham per gram lower at Dh209 on Wednesday morning. While 22K, 21K and 18K were trading at Dh196.25, Dh187.25 and Dh160.5 per gram.
Edward Moya, a senior market analyst at Oanda, said gold prices are declining as investors continue to see the wrath of elevated inflation data that supports the argument for further global central bank tightening.
“Gold’s rough patch seems like it will continue a little while longer as gold-backed ETFs continue to see outflows. A weaker dollar and a flight-to-safety might be what is needed for gold to stabilise and that could be happening. If the ECB doesn’t disappoint and delivers a massive 75 basis-point rate increase and if equities tumble as earnings expectations crumble, gold’s bleeding could stop. Geopolitical risks and the global energy crisis impact on growth should eventually lead to safe-haven flows for the yellow metal,” said Moya.
It depreciated 43 paise to 81.52 against the US dollar as the American currency strengthens and risk-averse sentiment among investors grows
Saudi Arabia’s benchmark index, which traded after a session’s break, slid 2.6 per cent, marking its biggest intraday fall since late-June
The Indian rupee is likely to fall further after hitting a record low of 80.70 against the dollar or 21.95 against the dirham on Thursday
Forex traders say the strength of the US dollar in the overseas market, and crude oil prices, weighed on the record low
The Fed is seen raising its benchmark lending rate by 75 basis points (bps) to tame persistently high inflation, although some traders expect a full percentage point increase