Gold prices in Dubai dipped at the start of the week as investors await key US inflation reports due later this week.
The 24K variant of the precious metal was trading at Dh530 per gram at the market open on Monday, down from Dh533.75 at the close of the markets on Friday. The other variants, 22K, 21K, 18K, 14K, were trading at Dh490.75, Dh470.50, Dh403.25, and Dh314.50, respectively, according to data by Dubai Jewellery Group.
Globally, spot gold was trading at $4,402.4 per ounce, down 0.53 per cent as of 9:11am UAE time. Silver was trading at $65.83 per ounce, down also 0.53 per cent.
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Gold has been supported by shifting expectations for U.S. monetary policy, Vijay Valecha, CIO of Century Financial, said.
“Federal Reserve Governor Christopher Waller indicated that he would favor keeping interest rates unchanged if inflation continues to moderate. This has reduced expectations of an imminent rate hike, although markets still price roughly a 50 per cent chance of a Fed hike later this month,” he explained.
The analyst said that the NFP report is the main near-term catalyst for this, adding that a weaker-than-expected payrolls figure, could strengthen expectations for a Fed pause and provide further upside for gold.
“On the other hand, stronger labor market data could revive rate-hike expectations and trigger some profit-taking. With next week’s inflation data also in focus, volatility is likely to remain elevated,” Valecha added.
Simon-Peter Massabni, Head of Business Development at XS.com, said that although gold remains under defensive pressure, the “fundamental backdrop continues to offer support, particularly amid ongoing uncertainty surrounding the U.S. interest-rate path and elevated geopolitical risks.”
Massabni added that the current pullback should not yet be interpreted that a new bearish trend is underway. “For now, I see it more as a corrective move and a period of repositioning ahead of the release of the U.S. data.”
Source: Khaleej Times