Gold prices in the UAE started the day on an upward trend on Tuesday morning, with the precious metal experiencing fluctuations in earlier trading sessions. By 9am local time, the 24K gold was trading at Dh302.75 per gram, marking a Dh0.75 increase from the previous close. The other variants, 22K, 21K, and 18K, were priced at Dh280.25, Dh271.5, and Dh232.75 per gram, respectively. The yellow metal fluctuated between Dh302 and Dh303.75 per gram on Tuesday. Internationally, spot gold remained stable at $2,502.01 per ounce at 9.10am UAE time, having briefly dipped below $2,500 the previous day before recovering.
Samer Hasn, a senior market analyst at XS.com, noted that gold maintained its position above $2,500 an ounce, reaching $2,510 at the start of the week. Comex gold futures also peaked at $2,550 on Friday. Hasn attributed the current gold market dynamics to optimism surrounding potential rate cuts and expectations for additional signals from the US Federal Reserve, including insights from the latest meeting minutes or Fed chief Jerome Powell’s upcoming speech at Jackson Hole. The outcomes of the Gaza ceasefire negotiations are also influencing gold prices.
Market sentiment was buoyed on Friday by the prospect of multiple rate cuts this year, following disappointing housing market data that reflected the strain of high mortgage rates. According to the CME FedWatch Tool, the market anticipates a cumulative cut of one percentage point starting in September, with an initial 25 basis points. Hasn cautioned that while previous concerns over the US economy had led to speculation of an emergency 50 basis point cut in September, this scenario is now less probable. The market will scrutinize Powell’s speech or the minutes from the June FOMC meeting for further indications of a potential rate cut this year.
Hasn also highlighted that a more hawkish stance than anticipated could trigger a substantial correction in gold prices. Despite this, both monthly and core inflation continue to rise.
