UAE: Gold prices rise in Dubai as dollar weakens

Gold prices rose to a five-month high on Monday, as the US dollar weakened slightly after more Chinese cities relaxed Covid-19 restrictions over the weekend.

Spot gold was up 0.52 per cent at $1,808 per ounce, as of 9.10am UAE time.

In the UAE, the 24K gold price jumped more than one dirham per gram at the opening of the markets on Monday.

The Dubai Gold and Jewellery Group data showed 24K trading at Dh219.0 per gram as compared to its previous close of Dh217.75 per gram. Among the other variants of the yellow metal, 22K opened at Dh205.75, 21K at Dh196.25 and 18K at Dh168.25 per gram.

“The market still expects the Fed to slow their pace of tightening, which is providing support to gold,” said Matt Simpson, an analyst at City Index, referring to the strong jobs data.

"Also, news that China is scaling back its Covid-19 restrictions means that gold demand will increase in the region, further supporting prices," Simpson told Reuters.

Data released on Friday showed US employers hired more workers than expected in November and increased wages, shrugging off mounting worries of a recession, but that will probably not stop the Federal Reserve from slowing the pace of its interest rate hikes starting this month.

Market participants are pricing in a 91 per cent chance of a 50-basis point rate hike at the Fed's meeting this month.

Lower interest rates tend to be beneficial for gold as it reduces the opportunity cost of holding the non-yielding asset.

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