Gold prices in Dubai have fallen slightly after reaching a new record high on Tuesday. The 24K variant of gold has dropped to Dh321.5 per gram from Dh323.25 per gram on Tuesday evening. This decrease came after the prices hit an all-time high due to increased demand for the safe-haven commodity amid rising tensions between Israel, Iran, and Hezbollah. Iran launched an attack on Israel on Tuesday, prompting a surge in gold prices.
Other variants of gold, including 22K, 21K, and 18K, also saw a decline in prices, with rates dropping to Dh297.75, Dh288, and Dh247 per gram, respectively. Spot gold was down by 0.24 per cent at $2,654.06 per ounce at 9.07 am UAE time. Naeem Aslam, chief investment officer at Zaye Capital Markets, mentioned that the rally in gold prices has been supported by the weakening dollar index. However, a potential improvement in the dollar index could lead to a change in trader sentiments.
Vijay Valecha, chief investment officer of Century Financial, attributed the decline in gold prices to Federal Reserve Chair Jerome Powell’s hawkish stance on the economy. Powell hinted at the possibility of two more interest rate hikes this year, leading to a stronger US dollar. As a result, investors moved away from gold, which is a non-yielding asset. Market expectations for a 50-basis-point rate cut in November have decreased, affecting gold prices. Valecha anticipates continued volatility in gold prices as investors monitor US economic indicators closely.
Overall, the fluctuation in gold prices in Dubai is influenced by various factors, including geopolitical tensions, monetary policy decisions, and economic indicators. The recent rise and fall in gold prices reflect the dynamic nature of the market and the impact of global events on commodity pricing. As investors navigate through these uncertainties, staying informed about market trends and developments is crucial for making well-informed investment decisions. Whether gold prices will continue to decline or rebound in the coming days remains to be seen, as market conditions evolve.
