UAE: Gold prices continue to rise in early trade

The 24K variant of the yellow metal was trading at Dh288 per gram as compared to last night’s close of Dh287.5 per gram

by

Waheed Abbas

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Published: Fri 17 May 2024, 10:45 AM

Last updated: Fri 24 May 2024, 10:12 AM

Gold prices were trading higher at the opening of the markets in the UAE on Friday morning.

The 24K variant of the yellow metal was trading at Dh288 per gram as compared to last night’s close of Dh287.5 per gram. Among the other variants, 22K, 21K and 18K were trading at Dh266.75, Dh258.25 and Dh221.25 per gram, respectively.


Spot gold was selling at $2,381.3 per ounce, up 0.13 per cent.

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Ole Hansen, head of commodities strategy, at Saxo Bank, said once the rate cut cycle begins later this year, gold will likely see renewed demand from exchange-traded fund (ETF) investors, many of whom have been net sellers since 2022, when the interest rate cycle started.

“This process helped lift the cost of holding non-interest-paying gold relative to US T-bills, which currently offer a 12-month return above 5 per cent,” he said.

Hansen continued: “Gold has held above technical levels throughout the latest and, once again, shallow consolidation phase, which otherwise could have triggered long liquidation from managed money accounts. It is currently holding an elevated speculative long position in the futures market.”

The gold prices have been mostly dictated by the US Federal Reserve’s decision to cut rates and geopolitical tension in the region.

“The general stance among traders is that perhaps the Fed will cut interest rates as early as September. Despite the disappointment of not being the first major central bank among the Bank of England and the European Central Bank to lower their rates by next month, an interest rate cut is still imminent,” said Naeem Aslam, chief investment officer, Zaye Capital Markets.

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