Gold prices in Dubai gained Dh1.75 on Monday morning as the precious metal extended its recovery, supported by expectations that the US Federal Reserve could keep interest rates on hold in the coming months.
The 24K gold price was trading at Dh529.25 per gram at the market open on Monday, up from Dh527.50. The other variants of the yellow metal, 22K, 21K, 18K, and 14K, were trading slightly higher at Dh490, Dh470, Dh402.75, and Dh314.25, respectively.
The spot gold price was trading at $4,392.04 per ounce around 9:00am UAE time, up 0.31 per cent. Silver was trading at $65.44 per ounce, up 0.92 per cent.
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Analysts say the recent pullback from record highs near $4,500 an ounce was largely driven by profit-taking rather than a change in the metal’s longer-term outlook. Instead, the correction has helped the market stabilise after gold’s rapid rally.
Rania Gule, senior market analyst at XS.com, said recent US inflation data came broadly in line with expectations, while signs of a softer labour market have reduced the need for further monetary tightening. This has strengthened expectations that the Federal Reserve may leave interest rates unchanged, a scenario that typically supports gold by lowering the opportunity cost of holding the non-yielding asset.
Looking ahead, analysts say investors will closely watch upcoming US spending and consumer data for further clues on the Fed’s next policy move. A slowdown in economic activity without a resurgence in inflation would reinforce expectations for eventual rate cuts, supporting gold prices over the medium term, while stronger-than-expected data could temporarily lift the dollar and weigh on the precious metal.
Source: Khaleej Times