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Gold prices edged lower in Dubai and globally for a second straight session on Monday morning, as investors’ attention shifted to a meeting of the central bank for clarity on its strategy for raising interest rates, which could shed light on whether progress has been made in curbing inflation.
Spot gold was down 0.34% at $1,978.04 an ounce at 9:20 am UAE time.
In the UAE, 24K traded at AED 239.75 per gram on Monday morning, down half a dirham from the previous close. The 22K, 21K and 18K opened lower at Dh222.0, Dh214.75 and Dh184.25 per gram respectively.
Gold is highly sensitive to rising interest rates, which increases the opportunity cost of holding non-interest bearing bullion.
“U.S. Treasury yields strengthened after the PMI data flash last Friday, putting downward pressure on gold prices,” IG market analyst Yeap Jun Rong told Reuters.
The yellow metal fell more than 1 percent on Friday after surveys showed that business activity in the United States and the euro zone accelerated in April.
“While the Fed’s rate expectations have so far held steady, a further recovery in economic conditions in the coming weeks could fuel speculation about another rate hike in June or a delay in the timetable for rate cuts, which would weigh on non-economies. Yellow metal,” Yeap said.
– waheedabbas@khaleejtimes.com
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