Gold prices jumped nearly Dh2 per gram at the opening of the markets on Thursday as precious metal jumped more than one per cent globally on US interest rate cut expectations.
The Dubai Jewellery Group data showed a 24K variant of the yellow metal trading at Dh296 per gram on Thursday morning as against Dh293.75 per gram at the close of the markets on Wednesday. Among the other variants, 22K, 21K and 18K opened at Dh274.0, Dh265.25 and Dh227.25 per gram, respectively.
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The yellow metal’s prices have risen by around Dh6 per gram in the past 24 hours. Analysts expect the upward trend in prices will continue in the short term and rates could be Dh300 per gram due to Fed rate cut expectations and geopolitical tension in the Middle East before profit-taking place.
Globally, spot gold was steady at $2,444.3 per ounce at 9.10 am UAE time. The yellow metal climbed more than one per cent on Wednesday evening after US Federal Reserve chair Jerome Powell hinted that an interest rate cut could be on the table in September if inflation in the world’s largest economy stays in line with expectations.
According to Emirates NBD Research, the Fed kept the Fed funds rate unchanged at its FOMC rate-setting meeting on Wednesday, with the upper bound remaining at 5.50 per cent.
“This had been the market consensus expectation and our own, and our view has been since April that the first cut from the Fed in this cycle will come at the next meeting, scheduled for September. This looks increasingly likely to play out when looking at the language from the FOMC communiqué and Powell’s press conference following the decision, with Powell stating that ‘a reduction in our policy rate could be on the table as soon as the next meeting in September,” it said.
“Our forecast remains that we will see two 25bps cuts before the end of the year, one in September and one in December, despite the dot plot of FOMC member projections having come down to just one cut in the latest summary of economic projections in June. A September cut is fully priced in by markets,” it added.