Gold prices experienced a decline at the market opening in Dubai on Tuesday. Data from the Dubai Jewellery Group indicates that the 24K gold was trading at Dh303.75 per gram at the start of trading on Tuesday, down from Dh304.5 per gram at the previous night's close. The price reached a peak of Dh305.75 per gram during yesterday's midday trading. Analysts predict that the precious metal will maintain a trading price above Dh300 per gram, influenced by geopolitical tensions in the Middle East and anticipated interest rate cuts by the US Federal Reserve.
Among the other gold variants, 22K, 21K, and 18K saw decreases to Dh282, Dh273, and Dh234 per gram, respectively, in Dubai on Tuesday. On a global scale, gold traded at $2,509.21 per ounce, marking a 0.27% decrease. Oliver Stevens, the product development and market expansion manager at Flow Community, noted that remarks by US Federal Reserve Chair Jerome Powell have strengthened market expectations for an interest rate cut in September, enhancing the appeal of gold by reducing the opportunity cost of holding non-yielding assets.
During his address at the Jackson Hole Symposium, Powell suggested that the Federal Reserve is prepared to modify its monetary policy in response to forthcoming economic data. This has bolstered market confidence in a rate reduction, with current forecasts pointing towards a potential cut of either 25 basis points (bps) or 50 bps at the September meeting. Additionally, the expectation of a total reduction of 100 bps by year-end further supports gold prices, according to Stevens. He also highlighted that geopolitical tensions, especially in the Middle East, coupled with broader economic uncertainties, are increasing interest in gold as a safe-haven asset. These factors are anticipated to continue supporting gold's appeal and price as investors seek stability amid potential global disruptions.
