Gold prices inched higher at the opening of the markets in the UAE on Tuesday.
The Dubai Jewellery Group data showed 24K trading at Dh244.50 per gram on Tuesday morning as against Dh244.25 at the close of the markets on Monday. Among the other variants of the yellow metal, 22K was trading at Dh226.5, 21K at Dh219.25 and 18K at Dh188.0 per gram.
Spot gold was up 0.13 per cent at $2,019.08 per ounce as of 9.10 am UAE time.
Stay up to date with the latest news. Follow KT on WhatsApp Channels.
Rania Gule, market analyst at XS.com, said gold continued its upward trend despite reduced expectations of an interest rate cut by the Federal Reserve before the June policy meeting.
“The price maintains its strength, even as Consumer Price Index (CPI) and Producer Price Index (PPI) data for January strengthened the dollar. The reason behind the rise in gold prices is the Producer Price Index data for January, which defied expectations. Federal Reserve officials consider the recent surge in Consumer Price Inflation as temporary, affirming a longer-term trend indicating a significant decrease in inflation,” she said.
Gule added that markets still anticipate a Fed interest rate cut this year, despite reduced chances of that happening in June. “A delay in interest rate cuts could negatively impact gold. It’s worth noting that prolonged high interest rates reduce the attractiveness of non-yielding precious metals, as they increase competition for high-yield investments,” she said.
In addition, investors will also monitor developments surrounding additional stimulus measures from Chinese authorities in the coming months. While geopolitical tensions in the Middle East could lead to a rise in gold prices as it is considered a traditional safe-haven asset.
“The most significant event affecting the markets this week will be the release of the minutes from the Federal Open Market Committee meeting on Wednesday,” she added.