Gold prices in the UAE recovered on Tuesday morning after losing Dh7 per gram on Monday evening due to US recession fears sparking a broader selloff.
According to Dubai Jewellery Group data, the 24K variant of the yellow metal was trading at Dh2 per gram higher at Dh291.75 on Tuesday morning compared to last night’s close of Dh289.75 per gram. It lost Dh7 per gram yesterday as equity plunged worldwide due to recession fears in the world’s largest economy.
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Among the other variants of the yellow metal, 22K, 21K and 18K were trading at Dh270.0, Dh261.5 and Dh224.0 per gram, respectively.
Globally, spot gold was trading at $2,410.54 per ounce, up 0.25 per cent at 9.20am UAE time.
ADBC Research said in a note that growing recession fears, following Friday’s release of soft labour market data for July, fuelled risk-off sentiment, with global equity markets falling and bond markets rallying.
“The July NFP print was soft on all fronts, though the impact of Hurricane Beryl adds uncertainty. Upcoming labour and wider data will need to be closely watched for downside risks, particularly following Fed Chair Jerome Powell’s emphasis on the dual mandate and concerns over downside risks to the labour market expressed during last week’s FOMC meeting. An extended run of soft labour and activity prints could trigger larger rate cuts by the Fed. We already see a risk of 75 bps of cuts in 2H2024 following the July labour print, from 50 bps earlier,” it said in a note.
The study noted that dovish signalling from Powell during the FOMC meeting puts the onus on July CPI which is due next week to provide further evidence of disinflation progress.