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United Arab Emirates: Gold prices continue to fall, falling by 5.5 dirhams per gram this week – News

Published: Thursday, January 18, 2024, 09:41

The decline in gold prices continued in the United Arab Emirates on Thursday morning, hitting a five-week low.

Data from Dubai Jewelery Group showed 24,000 transactions at Dh243.25 per gram at the opening of markets on Thursday, compared to last night’s close of Dh245.0 per gram. Similarly, the $22,000, $21,000 and $18,000 variants of the precious gold were trading lower at Dh225.25, Dh218.0 and Dh186.75 per gram respectively.

Prices of the yellow metal in the UAE have fallen by Dh5.5 per gram this week so far.

Spot gold was down 0.1 per cent at $2,006.88 an ounce at 9.25 am UAE time on Thursday. It fell to $2,001.72 on Wednesday, its lowest level since Dec. 13, 2023, as hawkish comments from Federal Reserve officials and strong data dampened investor expectations for deeper, earlier cuts. of interest rates in the United States this year.

Vijay Valecha, chief investment officer at Century Financial, said the yellow metal faces significant declines due to increased demand for the US dollar, which regained its safe-haven appeal amid rising tensions in the Middle East and reduced expectations of aggressive cuts. of Fed rates this year.

The dollar strengthened, hitting a five-week high near 103.40 on Tuesday, boosted by reports of Iranian missile attacks near the US consulate in Erbil, Iraq, and Houthi rebels attacking a US-owned cargo ship off the coast of Yemen.

“Moderate risk sentiment and a less dovish speech from Federal Reserve Governor Christopher Waller contributed to the dollar’s recovery. Since gold is denominated in dollars, it experienced the repercussions of the stronger dollar. However, its status as a safe haven asset in times of uncertainty could mitigate losses,” said Valecha.

Ole Hansen, head of commodities strategy at Saxo Bank, said one of gold’s biggest problems remains a lack of investor interest through ETFs, where total holdings continue to fall, falling to a low of almost four years.

“Until we see the funding cost of holding a position in gold start to fall, the prospect of a pick-up in demand to support prices appears limited. Meanwhile, speculators in the futures market will continue to add volatility to the market as they buy into the strength, only to reduce their exposure as prices weaken,” he said.



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