UAE: Gold prices steady in Dubai in early trade

Analysts said strong US economic data stoked fears that the Federal Reserve would implement more interest rate hikes to rein in inflation

by

Waheed Abbas

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Published: Mon 27 Feb 2023, 10:25 AM

Gold prices were flat in Dubai on Monday morning and hovered near a two-month low.

According to the Dubai Jewellery Group, 24K opened unchanged at Dh219.25 per gram, while 22K, 21K and 18K were trading at Dh203.0, Dh196.5 and Dh168.25 per gram at the opening of the markets on Monday.

Globally, spot gold was unchanged at $1,810.48 per ounce.

Analysts said strong US economic data stoked fears that the Federal Reserve would implement more interest rate hikes to rein in inflation.

Data on Friday showed consumer spending shot up 1.8 per cent last month – the largest increase since March 2021. The personal consumption expenditures (PCE) price index, the Fed's preferred inflation measure, rose 0.6 per cent last month, after gaining 0.2 per cent in December.

"A two-year high consumer spending coupled with robust job numbers released earlier this month would give confidence to the Fed to boost rates to tackle inflation," said Hareesh V, head of commodity research at Geojit Financial Services.

"This may adversely affect the appeal of gold," which pays no interest, he told Reuters.

US Treasury Secretary Janet Yellen said on Saturday that new data showing inflation jumped unexpectedly in January signals the fight against inflation "is not a straight line" and more work is needed.

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