Gold prices in the UAE bounced back on Tuesday morning, following a Dh7 per gram drop on Monday evening triggered by US recession fears that led to a widespread selloff. Dubai Jewellery Group data shows that the 24K gold was trading at Dh291.75 per gram on Tuesday morning, a Dh2 increase from the previous close of Dh289.75 per gram. The decline on Monday was attributed to global equity market plunges due to concerns over the largest economy's recession.
Other gold variants, including 22K, 21K, and 18K, were trading at Dh270.0, Dh261.5, and Dh224.0 per gram, respectively. Internationally, spot gold was up by 0.25% at $2,410.54 per ounce as of 9.20am UAE time. ADBC Research highlighted that the release of weak July labour market data intensified recession fears, leading to a decline in global equity markets and a surge in bond markets.
The research firm noted that the soft July Non-Farm Payrolls (NFP) data, coupled with the uncertainty from Hurricane Beryl, could lead to more significant rate cuts by the Fed. They anticipate a potential 75 bps cut in the second half of 2024, up from the previously expected 50 bps. The Fed's dovish stance, emphasized by Chair Jerome Powell during the recent FOMC meeting, underscores the importance of the upcoming July CPI data in assessing the progress of disinflation.
