Gold prices plunged four dirhams per gram at the opening of the market in the UAE on Thursday morning due to gains in the US dollar and Treasury yields after the US Federal Reserve signalled interest rate hikes late on Wednesday.
Spot gold was trading at $1,814.73 per ounce, down by 0.41 per cent at 9.30 am UAE time.
In the UAE, 24K was trading at Dh219.75 per gram on Thursday morning as compared to Wednesday’s close of Dh223.75 per gram, down by four dirhams. Among the other variants of the precious, 22K fell to Dh206.5 per gram, 21K to Dh197.0 and 18K to Dh169.0 on Thursday morning.
With the threat of as many as five rate hikes this year, gold prices tumbled last night, down by 1.5 per cent to close at $1,819.59 an ounce, Emirates NBD Research said in a note.
“The outlook for gold will be increasingly challenging in the face of higher nominal and real yields in the US market,” it said in a note on Thursday.
Edward Moya, senior market analyst at Oanda, said gold prices tumbled as equities roared back.
“The return of risk appetite dampened the appeal for safe-havens and that sent gold back to the middle of its recent trading range. Just when gold looked like it was going to breakout, they pull it back in. The path higher for gold is there, but it will likely be a tough grind higher. Fed chairman Jerome Powell’s hawkish press conference sent gold to fresh lows as the Fed laid out the possibility of a much more aggressive balance sheet reduction and refused to rule out the potential of having an interest rate hike at each policy meeting,” said Moya.
Weaker crude oil prices could cap losses, but Asian and emerging market peers were weak this Thursday morning, notes a senior research analyst
Reports show inflation eased in October with consumer price index logging its lowest annual pace since January
It appreciated to 81.14 against the US dollar in early trade on Tuesday; forex traders said sustained foreign fund inflows have supported the currency
According to a recent government directive, retailers are not allowed to hike rates of 9 basic food items