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Friday, September 22, 2023

UAE: Gold Prices Drop Amid Dollar Strength

Gold prices in the UAE dropped by Dh1 per gram on Friday morning, driven by a surge in the US dollar during early trade. The 24K gold variant opened the markets at Dh231.75 per gram, down from Dh232.75 on Thursday.

Rates for other variants also declined, with 22K at Dh214.5, 21K at Dh207.75, and 18K at Dh178 per gram by 9am local time.

At 9:30am UAE time, spot gold experienced a 0.11% decrease, reaching $1,913.77 per ounce. Despite slipping from a two-and-a-half-week high, this could potentially mark the first week of gains for the month.

Investor attention is directed toward speeches by Federal Reserve Chair Jerome Powell and European Central Bank President Christine Lagarde, expected at the annual economic symposium in Jackson Hole, Wyoming. These speeches are anticipated to provide insights into future interest rate decisions.

Rania Gule, a market analyst at XS.com, noted that while gold has seen an upward trajectory this week due to declining yields, the likelihood of a sustained upward trend is limited.

The rise in risk-free interest rates, such as US Treasury bonds, poses a challenge to assets like gold. The current strong negative correlation between gold and yields has contributed to the recent decline in 10-year bond yields, impacting the strength of the gold rally.

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