Precious metal is currently trading near the psychological level of $2,300 within a descending channel established since April 22
Gold prices inched higher in UAE at the opening of the markets on Thursday.
According to Dubai Jewellery Group data, the 24K variant of the yellow metal was trading at Dh280.25 per gram on Thursday as compared to Dh279.75 per gram at the close of the markets on Wednesday. Among the other variants, 22K opened at Dh259.5, 21K at Dh251.25 and 18K at Dh215.25 per gram.
Spot gold was trading 0.4 per cent higher at $2,318.35 per ounce.
The precious metal came under pressure on Wednesday after the US Federal Reserve hinted that the interest rates could stay high for a longer period.
The Fed chose to keep rates unchanged on May 1, 2024,although it confirmed its intentions to cut them in the future. However, it expressed concern about the recent disappointment in inflation data, which could delay such cuts.
Antonio Ernesto Di Giacomo, market analyst at xs.com, said investors seek refuge in assets like gold during economic or market uncertainty.
“Gold is experiencing a moment of uncertainty due to a series of factors, including the Fed’s monetary policy decisions, US economic data, and the dollar’s strength. While the yellow metal has experienced a recent decline, its short-term trajectory will largely depend on how these factors unfold in the coming days and weeks. Investors will watch for further hints from the Fed about its interest rate plans and any changes in critical economic data. Ultimately, the direction of the gold price will continue to be influenced by a combination of economic, political, and external factors, making its future challenging to predict with certainty,” he said.
“Another critical factor putting pressure on gold is the dollar’s relative strength. The US currency has shown resilience against other major currencies, making gold, priced in dollars, more expensive for foreign investors and reducing its appeal as a haven. Additionally, geopolitical developments and other external events can influence the price of gold. For example, geopolitical tensions or the monetary policy of other major countries can significantly impact investors’ perception of risk and, thus, the demand for gold,” he said.
Vijay Valecha, chief investment officer, Century Financial, said gold is currently trading near the psychological level of $2,300 within a descending channel established since April 22.
Source: khaleejtimes