Dubai Gold Prices Plummet as Rate Hike Bets Skyrocket
The Dubai gold market saw prices drop for both 24K and 22K gold on Thursday, as investors increased their bets on a US rate hike in September. The 24K price fell to Dh533 per gram from Dh536.75 at the previous close, while 22K dropped to Dh493.75 from Dh497.
According to Reuters, traders are now pricing in a 58% chance of a September rate hike, up from 36% before Federal Reserve Chairman Kevin Warsh's comments. Expectations for a December increase also rose to 89%, according to the CME FedWatch tool.
Vijay Valecha, Chief Investment Officer at Century Financial, said that despite the short-term pullback, the broader picture remains supportive for gold. He noted that robust investment flows and central-bank accumulation continue to underpin the bullish backdrop.