UAE: Gold prices steady in Dubai after hitting a 2-week high

Gold steadied on Tuesday morning as the US dollar stabilised after a slide in the previous session that drove greenback-priced bullion to its highest level in two weeks.

Spot gold was trading at $1,855.84 per ounce, up by 0.11 per cent at 9.19am UAE time.

The dollar steadied after dropping to a one-month low in the previous session. A weaker dollar makes bullion more attractive to overseas buyers.

In the UAE, gold prices inched up at the opening of the market on Tuesday. The Dubai Gold and Jewellery Group data showed 24K trading at Dh224.75 per gram, up by Dh0.25 per gram from Monday’s close.

While 22K, 21K and 18K were trading at Dh211.25, Dh201.5 and Dh172.75 per gram, respectively.

Edward Moya, senior market analyst at Oanda, said yellow metal prices had a nice start to the trading week as risk appetite returned and the dollar crumbled after hawkish comments from the European Central Bank’s President Christine Lagarde.

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“Gold needs to see the dollar weaken for it to attract further investment and that could happen if Europe becomes even more aggressive with their rate hikes. Gold should start to see inflows over constant Covid fears for China and if investors become more optimistic that the US won't see a recession in 2023,” he said.

Moya added that further stimulus from the Chinese central bank and hopes that the US Federal Reserve will ease up on tightening once rates rise towards 3.0 per cent should be positive for gold. “If the dollar continues to weaken, gold should find resistance around the $1,885 level.”

Naeem Aslam, chief market analyst at AVA Trade, said the ECB's president Christine Lagarde has increased the speculations that the bank could be increasing the interest rate as soon as the end of Q3. “This means that era of negative rates could soon be coming to an end.”

waheedabbas@khaleejtimes.com

• Dubai