Gold prices in Dubai traded lower on Wednesday morning after the precious metal’s 24K variant lost Dh2.5 thus far this week and Dh10.75 in one month, giving investors ample relief just in time for Diwali.
The 24K variant was trading at Dh486.5 per gram at the open of the markets on Wednesday, down from Dh489 at the close of the markets on Tuesday. The other variants of the yellow metal, 22K, 21K, 18K, and 14K, were trading at Dh450.5, Dh432, Dh370.25, and Dh288.75 per gram, respectively.
Globally, the spot gold price was down 0.66 per cent at $4,034.46 per ounce as of 9:40am UAE time. Silver was down 0.98 per cent, trading at $53.92 per ounce.
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Ross Maxwell, Chief Strategy Officer of VT Markets, said that the yellow metal continues to benefit from structural demand, including central bank purchases and geopolitical uncertainty.
With the US midterm elections coming up in November, Maxwell explained that a divided Congress could provide a more supportive environment if reduced fiscal expansion expectations lead to lower yields and a weaker US Dollar. “This could strengthen Gold’s outlook beyond temporary safe-haven demand surrounding Election Day,” he said.
However, persistent inflation and a hawkish Federal Reserve could keep real yields elevated, limiting Gold’s recovery, he added. “A more convincing bullish signal would emerge if Gold establishes higher highs while real Treasury yields and DXY decline.”
The US midterm elections on November 3rd could become a significant catalyst for financial markets as investors assess how a potential shift in congressional control might influence fiscal policy, inflation and interest rates, Maxwell said. However, the biggest market reaction may not come from which party wins, but from how the result compares with what investors have already anticipated.
Source: Khaleej Times