UAE: Gold prices drop in Dubai in early trade
Gold prices fell in Dubai at the opening of the markets on Thursday morning.
According to Dubai Jewellery Group data, the 24K gold was trading at Dh246.0 per gram as compared to last night’s close of Dh246.75 per gram. The other variants of the precious metal also opened lower. The 22K, 21K and 18K were trading at Dh227.75, Dh220.5 and Dh189.0 per gram, respectively.
Globally, spot gold was trading at $2,031.42 per ounce as investors were waiting for further clarity on the US Federal Reserve’s monetary policy path.
Alex Kuptsikevich, senior market analyst at the FxPro, said the sharp rise and fall in gold at the end of last week had a close inverse correlation with US regional banks.
“Their problems triggered a short squeeze after the close of the regular session on Wednesday. However, the rapid recovery of the banks on Friday caused a sharp pullback.
“The much more difficult question is whether gold will continue to be in demand of bad news about banks. The gold rallies on the convulsions of regional credit institutions were more about a liquidity crisis, and gradually capital may flow back into dollar-denominated debt assets, which are currently offering impressive yields,” he said.
However, according to Kuptsikevich, it is worth taking a step back to realise that the banks’ problems are not the only driver for gold.
“Investors should also bear in mind the trend towards increasing purchases of gold as a reserve by emerging market central banks, which are also exposed to the risk of being hit by US or EU sanctions that block settlement in dollars and euros,” he added.
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source: khaleejtimes
