Gold prices slipped further in Dubai at the opening of the markets on Tuesday.
The 24K variant of the yellow metal fell half a dirham per gram to Dh302.25 per gram. Similarly, 22K, 21K and 18K also opened lower at Dh279.75, Dh270.75 and Dh232.25 per gram, respectively. Globally, gold traded at $2,495.45 per ounce at 9.06 am UAE time.
Vijay Valecha, chief investment officer, Century Financial, said gold extended its decline, trading just below the key psychological threshold of $2,500.
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“The precious metal has faced pressure from the strengthening US dollar and surge in Treasury yields after the Core PCE Price Index remained steady at 2.6 per cent in July. Additionally, concerns about a slowing Chinese economy, the world’s largest gold buyer, have further weighed on gold prices. Nonetheless, despite the dip, the precious metal has risen 20 per cent so far this year amidst resilient demand from central banks, expectations of rate cuts, and haven demand from geopolitical tensions,” he said.
Going forward, he said increasing expectations of a potential interest rate cut by the US Federal Reserve (Fed) in September could help limit gold’s losses, as lower interest rates decrease the opportunity cost of holding non-yielding assets like gold.
Immediate support, according to Valecha, for the metal is seen near $2,470-75 while resistance is seen near the recent high of $2,531.