Gold prices drop in Dubai by 0.83%

Gold prices in Dubai dropped on Monday, 25 April, to their lowest in more than two weeks, as stakes for an increasingly hawkish and aggressive US Federal Reserve approach to tighten the monetary policy raised the dollar and pressured the market for bullion.

Gold prices in Dubai dropped on Monday, 25 April, to their lowest in more than two weeks, as stakes for an increasingly hawkish and aggressive US Federal Reserve approach to tighten the monetary policy raised the dollar and pressured the market for bullion. Spot gold was down by 0.83% at $1,916.99 per ounce as of 9.15 am UAE time.

UAE also witnessed the price drop of yellow metal by Dh2 per gram during the opening of the market on Monday morning.

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The data of the Dubai Gold and Jewellery Group exhibited 24K trading at Dh232 per gram, down by Dh2 per gram from its last close.

Among the other variants of this precious metal, 18K at Dh178.25, 21K at Dh208 and 22K opened at Dh218 per gram on Monday morning.

Though the ten-year US Treasury returns is around 3%, and theoretically, that is supposed to be a tipping point for gold, it is more about real profits that are now starting to catch up and that will be weighing on gold, said a managing partner at SPI Asset Management, Stephen Innes.

With anticipations for a half-percentage point interest rate increased at the Fed’s May meeting now locked in, whereas traders on Friday, 22 April, got into bets that the US central bank will go even larger in subsequent months.

The dollar set near its highest in two years, creating greenback-priced gold more expensive for other currency holders.

Gold is highly exposed to increasing US short-term interest rates and higher yields, which raise the opportunity cost of holding non-yielding bullion. It is yet, seen as a secure store of value during financial and political crises.

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Tariq Saeed

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