Gold prices were steady at the opening of the markets in Dubai on Tuesday after losing Dh2 per gram on Monday. At 9am UAE time, the 24K variant of the yellow metal was trading at Dh319.5 per gram. Among the other variants, 22K opened at Dh296.0, 21K at Dh286.5, and 18K at Dh245.5 per gram. Globally, spot gold was trading at $2,639.79 per ounce, up 0.17 per cent at 9.05 am UAE time.
Analysts said profit-taking took place this week after a rally in gold prices, which reached an all-time high last week. Gold prices eased on Monday but remained near last week’s record highs. The rally in gold prices has been driven by safe-haven demand, fueled by rising geopolitical tensions in the Middle East, the Federal Reserve’s recent interest rate cut, and concerns about the economy. Gold prices could continue to benefit from market expectations of another 50-basis-point rate cut this year, according to Tito Iakopa, commercial director at FlowCommunity.
This week’s focus is on the non-farm payrolls report, which may provide additional insight into the US labor market. Fed Chair Jerome Powell and Governor Michelle Bowman are also scheduled to speak later, which could trigger volatility in gold prices. If Powell hints at further monetary easing, the dollar could weaken, providing further support for gold. Geopolitical tensions in the Middle East continue to drive demand for safe-haven assets like gold, as investors seek protection from risks, providing additional support to precious metal prices.
Gold prices are influenced by various factors such as geopolitical tensions, economic uncertainty, interest rate cuts by the Federal Reserve, and investor demand for safe-haven assets in times of crisis. The recent rally in gold prices reflects these factors, with gold reaching all-time highs in the past week. Analysts suggest that market expectations of further interest rate cuts and geopolitical tensions in the Middle East will continue to support gold prices in the near term.
Investors are closely watching key economic indicators, such as the non-farm payrolls report, to gauge the health of the US labor market. Any indications of weakness in the labor market could prompt further monetary easing by the Federal Reserve, which would likely benefit gold prices. Additionally, speeches by Fed officials could provide insights into the central bank’s monetary policy stance, leading to volatility in gold prices.
Overall, the outlook for gold prices remains positive, with continued support from safe-haven demand and market expectations of further monetary easing. Geopolitical tensions and economic uncertainty are contributing to the bullish trend in gold, making it an attractive investment option for investors seeking protection from risks. As global economic conditions evolve, gold prices are likely to respond to changing market dynamics, presenting opportunities for investors to capitalize on price fluctuations in the precious metal market.
