UAE: Gold price drops over Dh1 per gram, likely to fall further

Gold edged lower on Tuesday morning as an uptick in the US dollar and bond yields weighed on bullion's appeal, with investors awaiting more cues on the Federal Reserve's rate-hike path.

Spot gold was down 0.2 per cent to $1,706.25 per ounce in early trade.

In the UAE, the 24K gold price fell more than one dirham per gram on Tuesday morning.

The Dubai Gold and Jewellery Group data showed 24K trading at Dh207.0 per gram at the opening of the market on Tuesday as compared to Monday’s close of Dh208.25. Among the other variants of the yellow metal, 22K opened at Dh194.25, 21K at Dh185.5 and 18K at Dh159.0 per gram.

The dollar was up 0.1 per cent against its rivals, making greenback-priced bullion more expensive for buyers holding other currencies.

Jeffrey Halley, senior market analyst, Oanda, said gold had another unimpressive session overnight, peeping above $1,720 intraday but closing almost unchanged at $1,709 an ounce by the session's close.

“Gold’s inability to hold onto even modest rallies in prices, even as the dollar falls and US bonds trade sideways, is a major concern in my option. It suggests that risks remain heavily skewed towards the downside. The US dollar index is over 150 points off its peak from last Friday, yet gold remains glued to 11-month lows. It seems that only a much deeper correction lower by the US dollar will grant gold a stay of execution,” said Halley.

Thomas Westwater, analyst at DailyFx, said the price behaviour suggests that gold bulls may have completely abandoned the case that prices would benefit from extremely high global inflation.

waheedabbas@khaleejtimes.com

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