Gold prices in the UAE saw an increase on Monday, May 6, attributed to investors’ expectations of the US Federal Reserve cutting rates later in the year. The 24K gold variant was trading at Dh279.5 per gram, higher than last week’s close of Dh278.75 per gram. Other variants, such as 22K, 21K, and 18K, were also trading at higher prices.
Spot gold prices were up at $2,311.22 per ounce at 9.28 am UAE time, a 0.76% increase driven by expectations of a Fed rate cut and tensions in the Middle East. The US Federal Reserve recently decided to maintain its key monetary policy rate, maintaining a 22-year high, with predictions of a rate cut by the end of the year.
Vijay Valecha, chief investment officer at Century Financial, noted that this was the sixth consecutive time the central bank chose not to make changes to interest rates, with expectations of at least one rate cut by the year’s end. Gold and precious metal jewellery demand dropped in the first quarter of the year due to record high prices and geopolitical tensions.
World Gold Council data showed a 10% year-on-year decrease in gold demand in the UAE in the first quarter of 2024, with the lowest demand in nine months. Jewellery demand fell by 10% year-on-year to 8.8 tonnes, while bars and coins demand also dropped by 10% to 2.0 tonnes. The decline was attributed to strong buying by central banks and global geopolitical tensions.
