Dubai Gold Price Holds Steady as US Fed Rate Hike Expectations Rise
The gold price in Dubai remained stable on Tuesday morning, after experiencing a strong rally last week and a hawkish speech by US Federal Reserve Chairman Kevin Warsh. The 24K variant of gold was trading at Dh533.50 per gram at the market open, gaining Dh0.75 from the previous day's close. Among other variants, 22K was trading below Dh500 per gram at Dh494.
Spot gold prices globally fell by 0.09% to $4,426.1 per ounce on Tuesday morning, while silver gained 0.05%, trading at $66.29 per ounce. This decline comes after Warsh's remarks on Friday, which lifted expectations of a potential interest rate hike before the year-end.
According to Ole Hansen, Head of Commodity Strategy at Saxo Bank, the next key support for gold is around $4,328, the 50% retracement of the August rally. Analysts at Julius Baer believe that inflation pressure will continue to ease, making a rate hike unlikely in the near future.
Carsten Menke, Head Next Generation Research at Julius Baer, emphasized the importance of US monetary policy clarity and conviction in determining long-term demand for gold and silver from investors. He noted that beyond short-term price swings, investors' focus should be on the dollar and bond yields considering the ongoing fiscal challenge posed by US debt.