In the UAE, the price of gold per gram has seen a decline of three dirhams this week, landing at Dh232.5 on Friday compared to Dh235.5 at the opening on Monday. According to experts, this dip is likely to continue in the forthcoming weeks.
The lowering prices affect different purities of the metal, with the 22K, 21K, and 18K categories closing at Dh215.25, Dh208.25, and Dh178.5 per gram, respectively. The international market mirrored this trend, with spot gold decreasing from $1,945.47 to $1,919.14 per gram over the same period.
Bas Kooijman, CEO and asset manager at DHF Capital, attributes the continual decline to the solid economic performance in the US and fluctuations in its monetary policy. “The robust US economic resilience has been imposing pressure on gold prices, and it is anticipated to persist potentially into the next year,” said Kooijman.
Kooijman remarked that gold has been on a downward trend since the beginning of September when it reached nearly $1,953. He pointed out that the rising yields of US treasuries in the short term have been diverting investors away from gold, a situation exacerbated by the disappointing economic data from Europe and China.
Looking forward, traders and investors are keenly awaiting new data that will be deliberated in the upcoming Federal Reserve meeting slated for later this month. The insights will potentially offer cues on the likelihood of further interest rate hikes this year.
Gold is likely to experience increased volatility next week due to potential surprises in inflation and job market data. Kooijman cautioned that the uptick in US dollar gains since mid-July might exert additional pressure on gold prices.
The financial analyst based in Dubai emphasized the critical role of US economic indicators, including non-manufacturing sector statistics and job market performance, in steering the future of gold prices. “A surge in interest rates could further direct investors towards high-yielding US treasuries and away from gold, dragging the gold prices down further,” he explained.
