UAE Gold Prices Dip at Market Opening

Gold prices in the UAE experienced a minor dip at the opening of the markets on Tuesday. 

The 24K variant of the precious metal, which is highly sought after, was trading at Dh241.5 per gram during the morning trading session. 

This marked a decrease of half a dirham per gram compared to the previous night’s close of Dh242.0 per gram. 

Other popular variants, including 22K, 21K, and 18K, also opened lower, with prices of Dh223.5, Dh216.5, and Dh185.5 per gram, respectively, according to data from the Dubai Jewellery Group.

Global Factors Impact Gold Prices:

On a global scale, the price of gold remained relatively stable, with spot gold trading at $1,994.67 per ounce as of 9:20 a.m. UAE time. 

However, it had recently slipped below the critical $2,000 milestone. This decline coincided with investors’ focus on upcoming central bank meetings, particularly the US Federal Reserve’s policy outlook.

Vijay Valecha, Chief Investment Officer at Century Financial, noted that despite the recent drop in gold prices from the $2,000 mark, they continued to hold onto their recent gains. 

This resilience could be attributed to geopolitical tensions in the Middle East, which have bolstered gold’s status as a safe-haven asset. 

It’s worth mentioning that gold is often considered a hedge against inflation, but the potential for an increase in interest rates by the US Federal Reserve could reduce its appeal.

Market Expectations and Technical Analysis:

According to CME’s Fed Watch Tool, market participants are currently pricing in a 96.1% chance that the interest rate will remain unchanged. 

Technically, the price of gold is hovering close to the $2,000/ounce mark and is still following an upward trajectory within a bullish channel. 

This suggests that the bullish trend will likely persist, with the next major target at $2,020.

Vijay Valecha commented, “As a result, the bullish trend scenario will continue to be active, and it may be preceded by a brief period of sideways fluctuation influenced by current stochastic negativity.” 

He also pointed out that breaking above the $2,020 target could push the price to $2,040, representing a significant resistance level. 

Holding above $1,982 is crucial for the expected upward movement to continue.