Gold prices in Dubai experienced a decline at the start of trading on Tuesday, with the 24K gold variant dropping by half a dirham per gram to reach Dh302.25 per gram. Concurrently, the prices for 22K, 21K, and 18K gold also decreased, opening at Dh279.75, Dh270.75, and Dh232.25 per gram respectively. On a global scale, gold was trading at $2,495.45 per ounce as of 9:06 AM UAE time.
Vijay Valecha, Chief Investment Officer at Century Financial, noted that gold continued to fall, hovering just below the significant psychological mark of $2,500. Valecha attributed this downturn to the robust US dollar and rising Treasury yields, influenced by the Core PCE Price Index holding steady at 2.6% in July. Moreover, the market's worries over a decelerating Chinese economy, a major gold consumer, have added to the downward pressure on gold prices. Despite these challenges, gold has still managed to gain 20% this year, buoyed by strong demand from central banks, anticipated rate reductions, and safe-haven buying due to geopolitical tensions.
Looking ahead, Valecha suggested that growing expectations for a possible interest rate cut by the US Federal Reserve in September might mitigate gold's losses, as lower interest rates reduce the cost of holding non-yielding assets like gold. He identified immediate support for gold around the $2,470-75 range, with resistance anticipated near the recent peak of $2,531.
