Gold prices in Dubai experienced a decline during the initial trading hours on Monday, following significant gains recorded in the previous week. In the United Arab Emirates, the price of 24K gold stood at Dh288.75 per gram at 9 am, a slight decrease from Dh289.25 at the weekend's market close. The other variants, including 22K, 21K, and 18K, also started trading lower at Dh267.25, Dh258.75, and Dh221.75 per gram respectively. The yellow metal had surged by nearly Dh4 per gram in the final two trading sessions of the past week. Internationally, gold maintained stability, trading at $2,384.69 per ounce in the early hours.
"We've observed some selling of gold in the early Asian trading session today, but after a robust 2.8 percent increase last week, the gold bulls require further selling in the USD to drive the price towards $2,400," commented Chris Weston, the head of research at Pepperston. "The prevailing market conditions suggest that any pullbacks should be restricted to around $2,365, but with Jay Powell's testimony to the House on Tuesday and the US core CPI announcement on Thursday, gold traders face significant event risks this week."
The primary catalyst for the upward trend in gold prices has been the increased buying in the US bond market, with the US 2-year Treasury yields falling by 15 basis points to 4.60 percent, breaking through the 4.85 percent to 4.65 percent range that had persisted since mid-June. Weston further noted, "We can consider the possibility that gold might receive additional attention if there's evidence that the Republicans could surpass current expectations and secure the House, enabling them to extend the 2017 Tax Cut and Job Act in 2025. This, along with other measures, could lead to an increase in the US fiscal deficit by over $1.5 trillion. Additionally, Freeport McMoran's reduction in gold production guidance has been a bullish factor in an already tight market."
