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UAE: Gold prices drop by half a dirham in Dubai morning trade – News

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Strong dollar continues to weigh on gold demand, analysts say


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published: Tuesday, May 30, 2023 at 10:02 am

Gold prices in the United Arab Emirates slipped on Tuesday morning after global precious metal prices fell, weighed down by the prospect of a U.S. debt-ceiling deal and a stronger dollar.

24K was trading at Dh234.75 a gram at the open on Tuesday morning, down half a dirham from last night’s close, according to Dubai Jewelery Group. Likewise, the 22K, 21K and 18K variants of the yellow metal traded at Dh217.5, Dh210.5 and Dh180.5 per gram, respectively.

Globally, spot gold was down 0.31% at $1,935.8 an ounce at 9:37 am UAE time.

A strong dollar continues to weigh on gold demand, said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.

U.S. President Joe Biden said on Monday he was optimistic about the prospects for Congress to pass the debt ceiling agreement he reached with House Speaker Kevin McCarthy.

High-volatility events such as the U.S. regional banking crisis and whether there will be a deal on raising the U.S. debt ceiling are passing, “reducing market appetite for gold as investors seek alpha,” said Michael Langford, director of consultancy AirGuide at the firm. .

On the other hand, Fed officials have turned up in recent days, taking a hawkish stance on interest rates – which also partly offset the safe-haven flow around the US debt ceiling situation, as rising rates reduce the appeal of zero interest rates – Yield bullion .

After weathering the 2008 financial crisis, Minneapolis Fed President Neil Kashkari is concerned about systemic risk. But now, as a U.S. monetary policymaker, he is more worried about inflation.

“If a more dovish approach is taken later in the year, it means that there could be some rate easing that would be seen as positive for equities, while also reducing investors’ riskier holdings of gold rather than other the willingness of the instrument – the asset class,” Langford added.

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