Gold prices jumped Dh2 per gram in Dubai at the opening of the markets on Wednesday as prices rose above $2,400 per ounce on Wednesday.
In the UAE, the 24K variant of the yellow metal was trading at Dh292.75 per gram at 9 am UAE time on Wednesday as against Dh290.75 at the close of the markets on Tuesday. Among the other variants, 22K, 21K and 18K were trading higher at Dh271.25, Dh262.5 and Dh225.0 per gram, respectively.
Globally, spot gold was trading at $2,416.88 per ounce, up 0.34 per cent ahead of the US economic data which could influence the Federal Reserve’s decision about rate cuts.
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Going forward, analysts expect the precious metal to stay at higher levels due to uncertainty surrounding US elections after president Joe Biden decided to pull out, geopolitical tensions around the world, and higher demand from India after it cut import duty from 15 per cent to 6 per cent.
George Pavel, general manager at Capex.com Middle East, said gold prices inched up after declining during the last few days, impacted by a strengthening dollar.
“The market is also bracing for further volatility in anticipation of key US economic data that could provide more insights into inflation trends in the US. The precious metal has faced uncertainty due to the speculation that Donald Trump might win the upcoming US presidential election, which has heightened consumer inflation expectations and could give a boost to the greenback,” he said.
He added that yellow metal prices could also be impacted in the near term by the recent unexpected interest rate cuts by the Chinese Central Bank. These cuts have contributed to positive market sentiment in the world’s second-largest economy, which could limit upside potential for gold.
“The market will closely watch key US economic indicators this week, including the advance estimate for Q2 GDP growth, personal spending and income data, and the June PCE price index, which is the Federal Reserve’s preferred measure of inflation. These indicators are crucial for assessing if inflation is moving towards the Federal Reserve’s 2% target. The market expects interest rate cuts to start in September. Slowing inflation and cooling economic growth, could provide further momentum to gold’s rebound,” added Pavel.