Gold prices struggled for momentum on Wednesday, as investors refrained from making big bets ahead of US inflation data that is expected to influence the pace of Federal Reserve rate hikes.
Spot gold was down 0.22 per cent at $1,790.30 per ounce at 9.10 am UAE time.
In the UAE, 24K gold prices dropped one dirham per gram at the opening of the markets on Wednesday. The Dubai Gold and Jewellery Group data showed 24K trading at Dh216.75 per gram on Wednesday morning as compared to Dh217.75 at the close of the markets on Tuesday.
Among the other variants of precious metal, 22K opened at Dh203.75 per gram, 21K at Dh194.25 and 18K at Dh166.5.
Vijay Valecha, chief investment officer, Century Financial, said the US inflation report due out on Wednesday could likely prove make-or-break for the yellow metal in the short-term.
“A deceleration in the US inflation rates could prevent a further rise in Fed rate hike odds and thus weighing on US Treasury yields, which could be a positive for the yellow metal. On the other hand, signs of persistently elevated US price pressures could provide a new spark for Fed rate hike odds and US Treasury yields, allowing US real yields to rally acting as a headwind for gold prices,” said Valecha.
He said traders are currently pricing in a 73.5 per cent probability the Fed continues the pace of 75-basis point rate hikes for its next policy decision.
“From a technical viewpoint, a sustained move over $1,798 will indicate the dominance of buyer's exposing price action to $1,812 and $1,822. Meanwhile, support can be seen near $1,760 levels,” he said.
Sales will pick up in the coming weeks on the eve of Diwali, which will be celebrated in October
Soaring prices have pushed annual inflation to a 40-year high, inflicting pain on American consumers and businesses, despite the drop in gasoline prices
South Asian nation's currency may breach 250 psychological barrier this month as downward trend likely to continue
All three major US stock indexes slid to levels not touched since mid-July, with the S&P 500 closing below 3,900
The substantial increase in the shares offered by the company provides investors with a highly attractive value proposition
US interest rates and higher yields increase the opportunity cost of holding non-yielding bullion while boosting the dollar