Dubai Gold Prices Drop Over Month Amid Strong Dollar and Fed Uncertainty
Gold prices in Dubai have seen a decline over the past month, with the 24K variant dropping to Dh498 per gram at the start of this week, down from Dh499 over the weekend. Other variants, including 22K, 21K, 18K, and 14K, are currently trading at Dh461, Dh442, Dh379, and Dh295.5 per gram, respectively. This marks a loss of Dh35.75 in one month for the precious metal.
The price adjustment comes as the US dollar remains strong, though recent soft economic data has reduced expectations of a Federal Reserve rate hike this month. According to Vijay Valecha, financial analyst and CIO of Century Financial, the probability of an October rate hike has decreased to nearly 50 percent, down from previous estimates of 70 percent. John Williams, Federal Reserve Bank of New York President and CEO, suggested that one further rate adjustment may be sufficient later this year.
Valecha also highlighted the risk posed by rising US Treasury yields, with the 30-year yield climbing above 5.61 percent, its highest level since 2002. He indicated that upcoming US economic data, including the core personal consumption expenditures (PCE) price index and non-farm payrolls report, will be crucial in determining gold's near-term direction. Valecha added that gold could retest support around $4,120 before making further gains.
Spot gold fell 0.18 percent to $4,132.2 per ounce, while silver saw a slight increase, trading at $60.92, up 0.84 percent.