Gold prices in the UAE experienced an upward trend at the beginning of the week, nearing a one-month high during early trading. According to data from the Dubai Jewellery Group, the price of 24K gold increased by half a dirham, reaching Dh235.5 per gram at the market’s opening, compared to last week’s close of Dh235 per gram. At 9 am UAE time, the prices for 22K, 21K, and 18K gold stood at Dh218.25, Dh211.25, and Dh181.0 per gram, respectively.
At 9:33 am local time, spot gold recorded a 0.25% gain, reaching $1,945.47 per ounce. This surge in gold prices can be attributed to a pullback in the US dollar, as well as the anticipation of the US central bank pausing interest rate hikes, which further supported the value of the precious metal.
Daniel Dubrovsky, a contributing senior strategist at dailyFX, highlighted that the US dollar performed poorly against major currencies in the past week, resulting in a significant rally for gold prices. Disappointing economic data from the largest economy in the world played a role in this development, leading financial markets to anticipate a less dovish stance from the Federal Reserve in the future.
Dubrovsky further explained that this shift in sentiment led to a decline in Treasury yields, allowing gold, as an anti-fiat asset, to outperform. Concurrently, the gains observed in Wall Street, represented by the Dow Jones and S&P 500, favored risk-sensitive currencies, while demand for the safe-haven US dollar weakened.