Gold prices in Dubai experienced a slight dip at the start of the trading day on Tuesday.
The 24-karat gold variety, the most popular, opened at AED 281.75 per gram, a decrease of AED 0.25 compared to yesterday. Similar dips were seen for other purities, with 22K, 21K, and 18K priced at AED 261.0, AED 252.5, and AED 216.5 per gram respectively.
The global gold market also witnessed a slight decline, with prices hovering around USD 2,326.78 per ounce at the time of this report. This trend is attributed to the ongoing uncertainty surrounding the US Federal Reserve’s future interest rate decisions.
Analysts believe that recent inflation data in the US suggests a potential slowdown, leading some to expect the Fed might cut interest rates twice this year. However, this view isn’t shared by all members of the Federal Open Market Committee (FOMC), the policymaking body of the Fed.
“This disagreement within the Fed is creating a wait-and-see approach for investors,” explains Daniel Takieddine, CEO for Mena at BDSwiss. “While lower interest rates could make gold a more attractive investment, the lack of a clear consensus from the Fed is keeping prices subdued.”
Beyond the Fed’s decisions, geopolitical tensions are also playing a role in the gold market. The recent political debates in the US and upcoming elections in France are seen as potential sources of instability, which could drive investors towards safe-haven assets like gold.
Overall, the gold market appears to be in a holding pattern, with both positive and negative factors influencing prices. Investors are likely to remain cautious until there’s more clarity on the Fed’s stance and the outcome of key political events.
