Gold prices in Dubai started slightly lower on Tuesday morning. By 9 am UAE time, the 24K gold had dropped by half a dirham per gram to Dh289.0, down from Dh289.5 per gram at the previous close. The other variants, 22K, 21K, and 18K, opened at Dh267.5, Dh259.0, and Dh222.0 per gram respectively.
Internationally, spot gold rose by 0.24 percent to $2,386.86 per ounce at 9.05am. Rania Gule, a market analyst at XS.com, noted that gold prices were affected by the strength of the US dollar, which faced resistance around $2,400 on Monday. She explained that news about potential escalation of the Middle East conflict into Lebanon has heightened investor anxiety, boosting the appeal of the US dollar as a safe haven. This overshadows other significant events this week, including the Federal Reserve meeting on Wednesday.
June's US job openings data and the July Conference Board Consumer Confidence Index, due for release on Tuesday, are anticipated to show a modest decline, increasing the likelihood of a rate cut in September. Gule added that the rising geopolitical tensions, particularly Israel's consideration of an attack on Lebanon, favor the US dollar as a safe haven, putting pressure on gold prices and weakening its momentum in the short to medium term.
However, Gule also pointed out that with a 95 percent chance of the Federal Reserve maintaining interest rates this Wednesday and a 100 percent chance of a rate cut in September, the geopolitical risks stemming from Middle East conflicts also support gold as a safe haven, potentially leading to volatile price movements.
