Introduction
On Friday, gold prices in the UAE saw a notable decline, opening nearly Dh3 lower per gram as the markets began trading. This drop reflects broader trends in global markets where the precious metal was trading at $2,334.6 per ounce at 9.25 am UAE time.
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Current Gold Prices in the UAE
The 24K variant, which is the purest form of gold commonly traded in the UAE, dropped by Dh2.75 per gram. It is now priced at Dh282.75 per gram, down from Dh285.5 per gram at the close of markets on Thursday. Similarly, other variants of gold also saw declines:
- 22K : Opened at Dh261.75 per gram
- 21K : Opened at Dh253.5 per gram
- 18K : Opened at Dh217.25 per gram
Global Influences on Gold Prices
Globally, the price of It is influenced by various economic factors. The recent drop is attributed to stronger-than-expected economic data from the United States. This data has pushed U.S. Treasury yields higher and strengthened the U.S. dollar against most other currencies.
Diego Colman, a contributing strategist at dailyFX, explained, “With the US economy performing exceptionally well and inflationary pressures proving more persistent than anticipated, the Federal Reserve is likely to maintain its restrictive policy stance for longer. This scenario of higher interest rates for longer could limit It upside potential in the near term, assuming risk aversion remains in check.”
Market Outlook and Investor Advice
Given the current volatility and the influence of multiple global factors, investors have been advised to adopt a cautious approach. The unpredictability of commodity prices has led many to take a wait-and-watch strategy.
The yellow metal had seen rallies earlier this year, driven by significant buying by central banks and expectations of the U.S. Federal Reserve lowering interest rates. However, with the current economic indicators pointing towards sustained higher interest rates, the outlook for gold remains uncertain.
Conclusion
As the UAE opens its markets with lower It prices, it reflects broader global trends and economic conditions. Investors are encouraged to remain vigilant and informed as they navigate these fluctuations. The interplay between U.S. economic performance, Federal Reserve policies, and global financial conditions will continue to shape the trajectory of It prices in the near future.
