Gold prices inched higher in Dubai at the opening of the markets on Thursday after jumping Dh2.5 per gram on Wednesday, reaching nearly a two-week high.
In the UAE, the 24K variant of the yellow metal was trading at Dh285.5 per gram at 9am UAE time on Thursday, up Dh0.25 per gram at the close of the markets on Wednesday. It rose nearly Dh2.5 per gram yesterday. Among the other variants, 22K, 21K and 18K were trading at Dh264.25, Dh256 and Dh219.25 per gram, respectively.
Globally, gold was steady at $2,357.89 per ounce at 9.10am UAE time.
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Rania Gule, market analyst at XS.com, said the downside for gold prices remains limited as US Treasury yields continue to be influenced by Federal Reserve chairman Jerome Powell’s comments at the ECB Forum on Central Banking in Sintra.
The benchmark 10-year US Treasury yield fell to 4.43 per cent after a streak of its biggest daily gains at the start of the week. Despite welcoming recent inflation data, which indicates a deflationary trend, Powell quickly added that he wants to see more before gaining enough confidence to start cutting rates.
“As a result, markets slightly increased their expectations for a rate cut in September after Powell acknowledged progress in reducing inflation, taking his comments as a signal for upcoming monetary easing. Currently, markets see a 67 per cent chance of a Fed rate cut in September, slightly up from around 63 per cent before Powell’s remarks.
“From my perspective, renewed dovish Fed expectations may continue to support gold demand, as the latest World Gold Council report showed central banks buying 10 tons of gold in May. The report mentioned that the National Bank of Poland was the largest gold buyer in May, adding 10 tons to its reserves,” said Gule.