As dawn breaks over the bustling markets of the United Arab Emirates, gold prices show a subtle uptick, reflecting a delicate balance of local and global dynamics. The latest data from the Dubai Jewellery Group unveils a modest rise in gold rates, echoing the nuanced shifts witnessed in the international bullion market.
At the onset of trading on Tuesday morning, 24K gold was reported at Dh261.5 per gram, a marginal increase from the previous night’s close of Dh261.25 per gram. Among its counterparts, 22K opened at Dh242.25, 21K at Dh234.5, and 18K at Dh201.0 per gram, illustrating the incremental fluctuations within the UAE’s gold landscape.
Internationally, the spotlight remains on spot gold, which was observed trading at $2,158.29 per ounce at 9:40 am UAE time. This stable performance signals a degree of equilibrium following last week’s volatility, where gold prices experienced a temporary dip from their peak. Bas Kooijman, CEO and asset manager of DHF Capital, attributes this stabilization to the market’s reaction to recent economic data, particularly in the United States.
“The precious metal prices stabilized to a certain extent after sliding last week from their peak as they reacted to last week’s economic data, as stronger-than-expected inflation supported the US dollar and Treasury yields,” Kooijman explains. “The data weighed on expectations for earlier interest rate cuts by the Fed.”
With the Federal Reserve’s interest rate decision looming, market sentiments remain cautious, anticipating the central bank’s stance on monetary policy. Although projections suggest rates to remain unchanged at 5.5 percent, any deviation from expectations could ripple through financial markets, influencing the trajectory of gold prices.
Kooijman suggests that a less hawkish stance from the Fed may lead to a weaker dollar, lower yields, and potentially bolster gold prices, providing a foundation for the metal’s resilience. Additionally, gold may find support from Chinese demand, further underpinning its upward momentum.
“Chinese gold ETFs saw inflows for the third consecutive month in February, adding RMB778 million ($109 million) and reaching a record-high total AUM of RMB31 billion ($4.3 billion),” Kooijman highlights. “Moreover, the People’s Bank of China reported another 12-tonne gold purchase in February, extending its buying streak to 16 months and bringing the total reserves to 2,257 tonnes.”
As the intricate dance of supply and demand unfolds in global markets, the allure of gold remains steadfast, offering investors a timeless haven in times of uncertainty. Whether in the streets of Dubai or on the trading floors of Shanghai, the enduring appeal of gold continues to shine bright amidst the ever-changing currents of the financial world.
