Gold Prices Rise in Dubai Amid Global Market Fluctuations
At 9am, the 24K variant rose to Dh317.25 per gram, compared to Dh316.25 per gram at the close of markets on Monday. Similarly, 22K, 21K and 18K rose to Dh293.75, Dh284.5 and Dh243.75 per gram, respectively.
Globally, spot gold was trading up 0.34 per cent at $2,620.73.
Gold, which had recovered for two days last week, resumed its decline on Monday.
The precious metal fell as the US dollar and Treasury yields regained gains after their correction last Friday.
“The pressure comes mainly from growing concerns about the Federal Reserve slowing the pace of interest rate cuts next year.
These concerns are not new, having emerged since Donald Trump was declared the winner of a second term in the White House, as his policies could threaten to revive inflation,” said Samar Hassan, senior market analyst at XS.com.
Despite these expectations regarding inflation and interest rates, the US economy continues to show resilience and is generally adjusting to higher rates.
The US economy managed to grow by 3.1 percent in the fourth quarter, which beat expectations, and the services sector growth increased faster than expected, and building permits and existing home sales were also better than expected.
“Continued and accelerating US economic growth could increase pressure on gold as it removes the uncertainty caused by tighter monetary conditions – the economy is adapting,” Hasn said.
Hasn believes that this factor will gradually take on a diminishing role, especially on the geopolitical side of the Middle East, which will eliminate the premium that gold has enjoyed.