Gold prices in the UAE saw a significant increase at the market’s opening on Thursday, with the 24K variant rising Dh0.75 per gram to Dh289.5. This follows a steady increase from the previous day’s closing at Dh288.75. Other gold variants, including 22K, 21K, and 18K, also experienced gains, trading at Dh268.25, Dh259.5, and Dh222.5 per gram respectively, according to the Dubai Jewellery Group.
Spot gold was recorded at $2,391.93 per ounce early on Thursday, influenced by a weakening US dollar and lower bond yields. The market’s movement is tied to the anticipation of potential rate cuts by the US Federal Reserve, possibly starting as early as September. Federal Reserve Chair Jerome Powell recently indicated a likely continued decline in US inflation through 2024 and suggested that further interest rate hikes might not be necessary.
Market analysts have noted that while gold faces challenges from higher interest rates, which make other investments more appealing due to the higher opportunity costs of holding gold, it continues to benefit from its status as a safe-haven asset amid ongoing geopolitical tensions in the Middle East. However, easing tensions, particularly between Iran and Israel, could make gold prices susceptible to changes in interest rate expectations, according to Antonio Ernesto Di Giacomo, a market analyst at xs.com.