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UAE: Gold prices drop further in Dubai in early trade

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The metal languished near a two and a half year low on prospects of further rate hikes by the US Federal Reserve to tame soaring inflation

Gold prices fell in the UAE on Tuesday morning as the metal languished near a two and a half year low on prospects of further rate hikes by the US Federal Reserve to tame soaring inflation.

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Spot gold was trading at $1,631.85 per ounce, as of 9.13am UAE time, after hitting its lowest since April 2020 at $1,620.20 on Monday.

In the UAE, the 24K gold prices fell to Dh197.75 at the opening of the markets on Tuesday as compared to Dh199.5 at the close of the markets on Monday. Among the other variants of the precious metals, 22K opened at Dh185.75, 21K at Dh177.25 and 18K at Dh152.0 per gram.

Yeap Jun Rong, IG market strategist, said slightly lower US yields and the dollar may have provided some room for gold prices to stabilise after its recent sell-off.

“The prevailing upside risk to inflation and, hence, monetary policy tightening, still remains a key obstacle limiting gold’s upside,” he said.

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Edward Moya, a senior market analyst at Oanda, said gold prices look like they headed back to previous night’s lows as this week will remain ugly for financial markets.

“The move in the dollar is not over and that should keep the pressure on bullion. Gold is struggling in this environment as many investors are getting very tempted at 2-year Treasuries. The dollar is up 18 per cent this year and this rally won’t be over until the peak in yields is in place,” he said.

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