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UAE: Gold prices drop, further Fed rate hike expectations weigh on yellow metal

Spot gold was down 0.3 per cent at $1,793.84 per ounce at 9.15am

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Gold prices slipped on Monday, weighed down by a rebound in the US dollar and expectations of further interest rate hikes from the Federal Reserve to tame high inflation.

Spot gold was down 0.3 per cent at $1,793.84 per ounce at 9.15am UAE time.

In the UAE, the precious metal prices fell one dirham per gram at the opening of the markets on the first trading day of the week.

The Dubai Gold and Jewellery Group data showed 24K trading at Dh217.5 per gram, down by one dirham as compared to its previous close. While 22K, 21K and 18K also opened lower at Dh204.25 per gram, Dh195.0 and Dh167.0, respectively.

Gold ended last week above the $1,800 mark, capping a fourth weekly gain, the longest winning streak in almost a year, as cooling inflation in the US suggested rate hikes might not be as aggressive as anticipated.

“Market participants will look for fresh clues regarding the size of the US central bank’s next rate increase. Next resistance for the metal is seen near $1,840 and support near $1,780 and $1,750. In the UAE, 24K gold price will likely trade between Dh212 and Dh 225 this week,” said Vijay Valecha, chief investment officer at Century Financial.

"Gold looks like in some consolidation here for a week or two before resuming the upward march towards $2,000 yet again. There may be even some who will feel the need to take profits to offset property portfolio weakness," said Clifford Bennett, chief economist at ACY Securities.

"Gold is likely to be supported around $1,785. A slip to $1,760 cannot be ruled out, but this would represent a fantastic long-term buying opportunity," said Bennett.

waheedabbas@khaleejtimes.com

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