Gold prices fell over Dh1 per gram in the UAE at the opening of the markets on Monday in line with the drop in global rates.
The Dubai Jewellery Group data showed 24K trading at Dh246.5 per gram on Monday morning, down from Dh247.75 per gram at the close of the markets on Friday. While 22K, 21K and 18K also traded lower at Dh228.25, Dh221.0 and Dh189.25 per gram, respectively.
Spot gold was down 0.42 per cent at $2,035.51 per ounce at 9.23 am UAE time due to fading expectations of an early rate cut in the US keeping the dollar and bond yields supported, ahead of a key inflation print due later this week.
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Richard Snow, a strategist at dailyFX, said the bullish outlook on gold is a little more complicated than the fundamental thesis suggests as a lot of positive momentum has already been priced in, providing a less impressive risk-to-reward ratio.
“It is with this in mind that an extended pullback would be favourable prior to assessing bullish continuation setups. The first level of support that could provide a springboard for gold is the zone around $2,010, with a deeper pullback highlighting $1,956. The medium-term uptrend has provided notable periods where gold prices cooled before continuing higher and therefore, it would be reasonable to foresee the potential for another pullback developing in Q1 of 2024,” he said.
Rania Gule, market analyst at XS.com, sees lower chances of a short-term interest rate cut may weaken gold’s attractiveness in the near term.
“Particularly, after Federal Reserve Chair Jerome Powell stated in the recent monetary policy statement that interest rate cuts will be a topic for future discussion, causing market mood swings and high volatility,” she added.