Gold Prices Plummet in Dubai Amid US-Iran Ceasefire Hopes
Gold prices in Dubai dropped by Dh4 per gram on Tuesday morning as hopes of a ceasefire between the US and Iran weighed on safe-haven demand. The 24K gold price in Dubai was trading at Dh487 per gram, down from Dh491 at the close of the markets on Monday.
The global spot gold market also saw prices fall to $4,041 per ounce, a decrease of 0.82%. Silver dropped by around 2.17%, trading at $57.13 per ounce.
Vijay Valecha, CIO of Century Financial, attributes the decline in gold prices to inflationary concerns and the likelihood of rate hikes. He notes that market participants will closely track the Federal Open Market Committee (FOMC) meeting as renewed tensions in the Middle East have triggered a rise in energy costs.
Valecha also points out that despite Trump's declaration of a ceasefire, the probability of maintaining current rates remains at 70%, according to CME FedWatch data. However, markets are still pricing an 88% probability of a rate hike by the end of the year.