Gold prices lost one-and-a-half dirhams per gram at the opening of the markets in Dubai on Tuesday, dropping from an all-time high of Dh313.5 per gram at the close of the markets on Monday.
According to Dubai Jewellery Group data, the 24K variant was trading at Dh312.0 per gram at 9 am UAE time. Among the other variants, 22K, 21K and 18K opened lower at Dh289.0, Dh279.75 and Dh239.75 per gram, respectively. Globally, spot gold was trading at $2,575.9 per ounce at 9.10am UAE time, down 0.3 per cent.
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Some analysts attributed the drop in prices to profit-taking following a strong rally in the past few trading days. Tito Iakopa, commercial director at FlowCommunity, said gold prices were volatile after hitting a new peak on Monday.
“A weakening dollar and low bond yields supported the asset. Growing expectations that the US Federal Reserve could announce a significant interest rate cut later this week could help maintain gold’s value. Market participants are increasingly betting on a 50 basis point reduction after recent job reports showed a softening labour market,” said Iakopa.
However, traders could exercise caution until the Fed’s meeting on Wednesday. Market attention will also shift to upcoming policy updates from the Bank of England (BoE) and the Bank of Japan (BoJ) later this week, which could introduce further volatility and impact gold prices.
“Looking ahead, the precious metal could maintain its bullish trend. Continued demand from central banks, investor concerns about the US elections, and risks of an economic slowdown are likely to continue to support gold’s appeal as a safe-haven asset,” added Iakopa.