UAE: Gold prices steady in early trade

Spot gold was up 0.21 per cent at $1,812.07 per ounce by 9.30am



by

A Staff Reporter

Published: Mon 4 Jul 2022, 9:35 AM

Gold prices were steady on Monday morning, as weakness in Treasury yields kept prices above the $1,800-mark and marginally outweighed pressure stemming from elevated US dollar levels.

Spot gold was up 0.21 per cent at $1,812.07 per ounce by 9.30am UAE time.

The Dubai Gold and Jewellery Group data showed 24K trading at Dh219.5 per gram, 22K at Dh206.25, 21K at Dh196.75 and 18K at Dh168.75.

Bullion prices hit a five-month low of $1,783.50 on Friday but recovered to end the session nearly steady.

“Once again, we saw buyers support gold with its break below $1,800 on Friday, and with US yields continuing to retrace, it allows the potential for gold to rise over the near term,” City Index senior market analyst Matt Simpson said.

"But the reality is that managed funds and large speculators are increasing their short bets against gold, and if we see a close below $1,800 then it could trigger another bout of selling," Simpson told Reuters.

Naeem Aslam, chief market analyst at Ava Trade, said the most important event of this week for traders and investors will be taking place towards the end of this week which is the US Non-Farm Payrolls (NFP) data.

“Any sluggish NFP reading is going to make the Federal Reserve even more nervous. Although, it is important to note here that the Fed Chairman has already warned that the Fed is willing to tolerate some pain in order to bring inflation lower. Many investors believe that the interest rate in the US could reach 2.5 per cent to 3 per cent by the end of this year, and that could be the cut-off point for the Fed i.e. when the Fed will stop increasing the interest rate,” said Aslam.

However, he added that it is important to note that the last time the Fed increased the interest to this level of 3 per cent, inflation was running around 4.3 per cent, and now US inflation readings are at 8 per cent, which means that the chances of the Fed backing off from hiking interest rate are remote.

-waheedabbas@khaleejtimes.com

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