Gold prices in Dubai edged lower at the opening of the markets on Tuesday.
At 9 am UAE time, the 24K variant of the yellow metal fell half a dirham per gram to Dh289.0 on Tuesday compared to last night’s close of Dh289.5 per gram. Among the other variants, the 22K, 21K and 18K opened at Dh267.5, Dh259.0 and Dh222.0 per gram, respectively.
Globally, spot gold was up 0.24 per cent at $2,386.86 per ounce at 9.05am.
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Rania Gule, market analyst at XS.com, said gold prices were influenced by the strength of the US dollar after facing resistance around $2,400 on Monday.
“News reports suggesting that the conflict in the Middle East may extend to Lebanon have kept investor concerns high, providing a competitive edge for the US dollar as a haven. Geopolitical risks overshadow key events of the week, particularly the Federal Reserve meeting scheduled for Wednesday,” she added.
June’s US job openings data and the Conference Board Consumer Confidence Index for July, set to be released on Tuesday, are expected to show a moderate decline, further increasing expectations for a rate cut in September.
“From my perspective, the increasing geopolitical concerns, with Israel considering an attack on Lebanon, support the US dollar as a haven, exerting pressure on gold prices and weakening momentum in the near and medium term,” added Gule.
However, she believes that with a 95 per cent probability that the Federal Reserve will keep interest rates unchanged this Wednesday and a 100 per cent probability of a rate cut in September, the geopolitical risks arising from conflicts in the Middle East also support gold prices as a haven, potentially causing some volatile price fluctuations.