Gold prices in Dubai fell again on Wednesday morning, extending an earlier loss manifested after the commodity reached an all-time high this week. Prices declined in tandem with the global peers as market participants waited on the side-lines for the decision of the U.S. Federal Reserve’s expected rate cut later in the day.
The 24K gold variant was also trading at Dh311 per gram in Dubai as of 9 am on Wednesday, down by Dh0. 75 from the close of the previous night’s business. Other gold variants also started on a weaker footing with 22K gold quoted at Dh288 while 21K gold at Dh278. 75, and 18K at Dh239.0 per gram.
This is the second successive decline in gold prices in Dubai, after the 24K gold touched an historic high of Dh 313 on Monday. Altogether, gold has eroded Dh2. It is only 5 since achieving this record peak.
Globally, Spot gold was trading at $2,568. 0.0002 per ounce, to $49 or thereabouts. 21% as of 9:10 am UAE time. This decline comes as investors wait for cues from the U. S Federal Reserve which is expected to deliver another rate cut to support the economy.
In an interview conducted on Monday, Marc Pussard, the head of risk at APM Capital, was quick to point out that the gold rally was triggered by a weaker greenback as well as the heightened forex market anticipations that the Federal Reserve is likely to embark on an aggressive campaign of monetary policy loosening.
Chris Weston, the head Research Analyst at Pepperstone, noted that the market is also wary of indicators that could further fuels gold prices. According to Weston, for gold to go above $2,600, there ought to be a clear signal that encourages new demand. But he stated that the situation is still volatile because the market is still determining the Federal Reserve’s stance.
Weston said that expectations of a 50 basis point rate cut along with a more dovish tone from the Fed can see US Treasury yields decline, which in turn can provide support to gold prices. Nonetheless, a 25 basis point cut may not be sufficient enough to weaken gold unless accompanied by hints of further loosening in the next meetings.
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The gold price declined during the current period with investors still anxious as they await the Federal Reserve decision. The future of the metal remains uncertain as per the analysts’ recommendations depending on the further measures of the U. S. central bank. Normally, gold gains from low interest rates due to reduced cost of carry on non-earning assets other than stock; the macros and fluctuations in equity markets could be another factor.
Any consumer that is lucky to be in Dubai at this time can using this consideration consider taking advantage of the current low prices should they be planning to stock up perhaps in anticipation of future price hikes. Gold is also a highly sought-after currency among investors, and changes in gold’s price are usually associated with shifts in economic trends, which makes this metal one of the most closely-watched commodities within global and regional contexts.