Gold prices experienced a slight decline in Dubai as markets opened on Saturday, dropping by half a dirham. Data from the Dubai Jewellery Group indicates that the 24K gold was trading at Dh281.75 per gram, a decrease from the previous night's close at Dh282.25. Other variants of gold also saw changes; 22K opened at Dh260.75, 21K at Dh252.5, and 18K at Dh216.5 per gram. These prices showed only marginal changes compared to the beginning of the week. Internationally, gold prices remained nearly stable, closing at $2,326.73 per ounce on Friday.
George Pavel, the general manager at Capex.com Middle East, attributed the subdued performance of gold to the Federal Reserve's commitment to maintain high interest rates for an extended period, which has kept US Treasury bond yields high and the US dollar strong. Pavel noted that despite the Fed's forecast of only one rate cut in 2024, market expectations lean towards potential cuts starting as early as September, followed by another in December. Should these cuts occur, they could provide additional support to gold prices, although uncertainty might continue to introduce volatility.
Traders are also on alert due to the impending US presidential debate scheduled for Thursday and the release of the US Personal Consumption Expenditures (PCE) Price Index on Friday. Pavel highlighted that ongoing geopolitical tensions and political uncertainties continue to uphold gold's reputation as a safe-haven asset. With major elections approaching in France, the UK, and the US, these factors are likely to enhance risk aversion, potentially benefiting gold prices.
