Gold prices observed a decrease both globally and in the United Arab Emirates (UAE) this Thursday morning, with Dubai’s market opening to prices Dh1.50 per gram lower than the previous close.
The dip comes as the US dollar strengthened and bond yields surged after recent communications from the Federal Reserve indicated a possibility of another rate hike within this year, coupled with a firmer monetary policy stretching until 2024 — a more stringent approach than earlier anticipated.
At the Dubai market’s opening on Thursday, the price for 24K gold stood at Dh233.5 per gram, witnessing a decrease from Dh235.0 per gram at the market’s close on Wednesday. The prices for 22K, 21K, and 18K gold also experienced similar drops, opening at Dh216.25, Dh209.25, and Dh179.25 per gram, respectively.
The spot gold market mirrored this trend, with prices sliding to $1,928.13 per ounce by 9.15 am UAE time. This is following Wednesday’s surge where prices reached a three-week high, the highest since September 1.
The Federal Reserve’s monetary policy announcement, where Jerome Powell hinted at maintaining a “higher for longer” approach, has been identified as a major trigger for the downturn. According to Daniel Dubrovsky, a senior strategist at dailyFX, this approach set off a reaction in the financial markets, ushering in a reevaluation of the Federal Funds rate and pushing back anticipations of rate reductions in the future.
Dubrovsky elaborated, “In response, Treasury yields and the dollar rose, working together to pressure precious metals, like gold and silver, lower.”
