Gold prices in Dubai saw a decline in early trading on the first day of the week after witnessing significant gains last week.
At 9 am, the 24K gold variant in the UAE was priced at Dh288.75 per gram, down from Dh289.25 at the weekend close. Other gold variants also opened lower, with 22K trading at Dh267.25, 21K at Dh258.75, and 18K at Dh221.75 per gram.
The yellow metal had surged nearly Dh4 per gram in the last two trading days of the previous week. On the global market, gold remained steady at $2,384.69 per ounce in early morning trade.
Chris Weston, head of research at Pepperstone, commented on the market movement: “We’ve seen some selling of gold in early Asia trade today, but after a solid 2.8 percent rally last week, gold bulls needed follow-through selling in the USD to push the price into $2,400.”
Weston also noted that while pullbacks should be limited to $2,365, significant events this week, such as Jay Powell’s testimony to the House on Tuesday and the US core CPI report on Thursday, could impact gold trading.
The primary driver of gold’s recent rise has been buying activity in the US bond market, with 2-year Treasury yields dropping 15 basis points to 4.60 percent. This marked a break from the 4.85 to 4.65 percent range it had maintained since mid-June.
Weston added that gold could see further support if the Republicans unexpectedly take the House, allowing them to extend the 2017 Tax Cut and Job Act in 2025, potentially increasing the US fiscal deficit by over $1.5 trillion.
Additionally, Freeport-McMoRan’s reduction in gold production guidance has been a bullish factor in an already tight market.
