Gold prices in Dubai surged by Dh3 per gram at the market opening on Wednesday, mirroring a global increase that pushed rates above $2,400 per ounce. Data from the Dubai Jewellery Group indicates that the 24K gold opened at Dh293.0 per gram, up from Dh290.0 per gram at the previous close. The 22K, 21K, and 18K variants also saw increases, trading at Dh271.5, Dh262.75, and Dh225.25 per gram, respectively. Internationally, spot gold was trading at $2,418.36 per ounce at 9.15am, marking a 0.38% rise.
Li Xing Gan, a financial markets strategist at Exness, noted that gold started the day higher and may continue to be volatile as investors await clearer signals on the Federal Reserve's policy stance. Gan emphasized the importance of the upcoming FOMC meeting and any remarks from Fed Chair Jerome Powell. He also highlighted the potential impact of key U.S. economic data, such as the Non-Farm Payrolls report on Friday, which could influence both the dollar and gold prices in the short term.
Gan further explained that the market's anticipation of a potential easing cycle by the Federal Reserve in September has put pressure on U.S. Treasury bond yields, potentially benefiting gold prices. He suggested that interest rate cuts could bolster gold's value in the medium to long term, as traders anticipate multiple rate cuts in the current and next year. However, he cautioned that gold's performance could still be affected by fluctuating demand. In the second quarter, jewelry demand declined, which might negatively affect gold prices in the near term. Nonetheless, robust demand from central banks could mitigate any significant downturn.
