Gold prices decreased by Dh2 per gram at the start of trading in Dubai on Wednesday, following a record high on Tuesday evening. By 9am UAE time, the 24K gold had dropped to Dh304.5 per gram, down from the previous day's close of Dh306.5 per gram, which was a historic peak. Meanwhile, the 22K, 21K, and 18K varieties were trading at Dh282.0, Dh273.0, and Dh234.0 per gram, respectively.
On a global scale, spot gold was valued at $2,516.96 per ounce, marking a 0.15% increase. The surge past $2,500 was attributed to a weaker dollar and speculation about interest rate reductions by the US Federal Reserve. Tito Iakopa, commercial director at FlowCommunity, noted that gold's ascent to an all-time high was driven by expectations of a Federal Reserve rate cut.
"Investors are intently awaiting signals from the Federal Reserve this week, especially from Fed Chair Jerome Powell's speech at Jackson Hole on Friday and the release of the latest FOMC minutes on Wednesday. The market is anticipating a substantial easing of monetary policy, with forecasts of up to 100 basis points in rate cuts for the year. This expectation has caused the US dollar to approach a 7-month low and US Treasury yields to fall, both factors that bolster gold prices," explained Iakopa.
"Furthermore, the ongoing uncertainty due to regional geopolitical tensions may sustain high demand for gold as a safe investment. The forthcoming US elections could also influence market sentiment, potentially enhancing the appeal of gold and other secure assets during periods of political instability," he added.
