Gold prices dropped over Dh1 per gram at the opening of the markets in the UAE on Wednesday morning. At 9am UAE time, the 24K variant of gold was trading at Dh292.25 per gram, down from Dh294.0 per gram at the close of the markets on Tuesday. Among other variants, 22K opened lower at Dh270.5, 21K at Dh261.75, and 18K at Dh224.5 per gram. Spot gold was trading at $2,413.3, down 0.34 per cent at 9.15 am UAE time ahead of the release of the US Federal Reserve’s minutes of the policy meeting. The recent high prices of gold were driven by central banks’ buying, geopolitical uncertainty, and increased purchases by China.
Shadi Salloum, regional director for Mena at XS.com, advised investors in the UAE to go slow with the market and not take very large positions, as the nature of gold is very sensitive. Mohamed Hashad, chief market strategist at Noor Capital, stated that market participants are focusing on cues from the Federal Reserve. Recent soft US inflation readings for April have increased hopes that the central bank might begin trimming rates as early as September. Anticipated rate cuts are expected to support metal prices, particularly gold, as lower interest rates typically increase the appeal of non-yielding assets.
Gold is considered a safe-haven asset, especially during times of economic uncertainty or geopolitical tensions. Investors often turn to gold as a store of value and a hedge against inflation. The fluctuation in gold prices is influenced by various factors, including central bank policies, global economic conditions, and market speculation. In recent years, the demand for gold has been fueled by factors such as increasing geopolitical risks, trade tensions, and currency fluctuations.
The precious metal market is highly volatile, and investors need to carefully monitor the market trends and make informed decisions. It is essential to diversify your investment portfolio and not rely solely on gold. Gold prices tend to move inversely to the US dollar, so any fluctuations in the currency market can impact the price of gold. Factors such as interest rates, inflation rates, and economic data releases can also affect gold prices.
With the current economic uncertainty and concerns about inflation, gold remains an attractive investment option for many investors. The recent drop in gold prices may present a buying opportunity for those looking to add gold to their investment portfolio. It is important to stay informed about market developments and seek advice from financial experts before making any investment decisions. By staying updated on the latest market trends and economic indicators, investors can make informed decisions and maximize their returns in the precious metal market.
In conclusion, the drop in gold prices at the opening of the markets in the UAE presents an opportunity for investors to enter the market at lower prices. With the support of anticipated rate cuts by the Federal Reserve, gold prices are expected to benefit from increased demand as lower interest rates make non-yielding assets like gold more attractive. As always, investors should exercise caution and make well-informed decisions when trading in the precious metal market. Stay updated on market trends and seek advice from experts to maximize your investment returns in the gold market.
