UAE: Gold prices drop over Dh2 per gram

Gold prices fell on Tuesday morning, after getting within a stone's throw of the key $2,000 per ounce level in the previous session, as lower US Treasury yields offset pressure from two-year highs in the dollar.

Spot gold dropped 0.17 per cent to $1,974.25 per ounce at 9.20 am UAE time.

The precious metal prices fell two-and-a-half dirham in the UAE on Tuesday morning as compared to Monday’s close.

According to the Dubai Gold and Jewellery Group data, 24K opened at Dh239 per gram on Tuesday as against its close of Dh241.5 on Monday.

Among the other variants of the precious metal, 22K was trading at Dh224.5 per gram, 21K at Dh214.25 and 18K at Dh183.75.

On Monday, gold prices climbed to $1,998.10 per ounce – their highest in more than a month – as the Ukraine crisis and inflation concerns lifted demand for bullion, before giving up most of those gains after the dollar and US 10-year Treasury yields firmed.

The dollar steadied near a two-year high hit in the previous session, as investors braced for multiple half a percentage-point rate hikes from the US Federal Reserve.

Naeem Aslam, chief market analyst at Ava Trade, said the fact about gold prices is that two prominent factors are constantly pushing prices.

“Rising inflation and conflict between Ukraine and Russia are on traders' minds when it comes to the precious metal's rally. The most intriguing fact about the gold price is that the current surge in the precious metal is taking place when the dollar index is looking immensely healthy in terms of its price action. Generally speaking, the dollar index is the main denominator for the gold prices, and when the dollar index increases in prices, we usually see the gold price moving lower and losing its uptrend,” said Aslam.

He added that gold prices flirting with the $2,000 price level sends a clear signal that yellow metal traders are less worried about the US Federal Reserve’s hawkish stance and they are more interested in pushing gold prices higher.

waheedabbas@khaleejtimes.com

• Dubai