Gold Prices in Dubai Surge, Then Rebound Amid Fed Rate Hike
Dubai's gold market experienced a brief surge after the US Federal Reserve raised interest rates on Wednesday, but prices quickly pared their gains. The 24-karat gold price rose to Dh515.75 per gram, up from Dh512 the previous day. However, this increase was short-lived as bullion prices cooled off and settled below $4,300 an ounce.
The Fed's decision led to a hawkish signal, with officials expecting further rate hikes. This sent treasury yields soaring, but they later pulled back after rising to their highest level since 2024. The easing of yields took some pressure off gold, which tends to struggle when yields are high due to its lack of interest.
Market Analyst Linh Tran at XS.com predicts that 'gold's near-term outlook is likely to involve consolidation with a slight downside bias.' A sustained recovery would require Treasury yields and the US dollar to cool down or economic data to reduce expectations for another rate increase. Spot gold is currently down 1.14% on Thursday, while silver has also lost value, trading at $63.73 and down 1.3%.