UAE Gold Prices Plummet to One-Month Low, Investors Cautious Amid Fed Policy Tightening
UAE Gold Prices witnessed a downturn, reaching a one-month low on Thursday morning, amid a strengthening dollar and concerns over the US Federal Reserve’s aggressive policy tightening approach, which negatively impacted the appeal of the non-yielding precious metal.
As of 9:15 AM UAE time, spot gold witnessed a decline of 0.3 percent, settling at $1,703.3 per ounce. This decrease followed the trend of global gold rates, which were also under pressure.
Here is a summary of the latest UAE Gold Prices for August 4, 2023:
|OUNCE||7,101.45 AED||–||–||7,094.11 AED|
|24 Carat||234.25 AED||–||–||234.00 AED|
|22 Carat||217.00 AED||–||–||216.75 AED|
|21 Carat||210.00 AED||–||–||209.75 AED|
|18 Carat||180.00 AED||–||–||179.75 AED|
UAE Gold Prices Plunge Amid Dollar Strength and Fed Tightening Policy
According to data from the Dubai Gold and Jewellery Group, the price of 24K gold plummeted by one-and-a-half dirham to Dh206.25 per gram at the opening of the markets on Thursday. Meanwhile, 22K, 21K, and 18K gold were trading at Dh193.75, Dh185.0, and Dh158.5 per gram, respectively.
Daniel McCarthy, a strategist at DailyFX, explained that the decline in UAE Gold Prices is a result of the ripple effects from last week’s Jackson Hole symposium, which continue to reverberate across various asset classes.
In the previous week, Federal Reserve Chair Jerome Powell emphasized the Federal Open Market Committee’s (FOMC) current priority of curbing inflation and bringing it back down to two per cent. However, the market misinterpreted Powell’s remarks on the Fed’s target rate being close to neutral after the July FOMC meeting.
The uncertainty surrounding the Fed’s future monetary policy has been one of the key drivers behind the recent drop in UAE Gold Prices. Investors are closely monitoring the central bank’s actions and statements to gauge the direction of the economy and potential interest rate adjustments.
Despite the current dip, analysts suggest that gold’s long-term outlook remains favorable, as it often serves as a hedge against inflation and economic uncertainties. Many investors still view gold as a safe-haven asset during times of market volatility and geopolitical tensions.
While the short-term fluctuations in UAE Gold Prices may be influenced by various factors, including the strength of the US dollar and central bank policies, it is crucial for investors to keep an eye on global economic developments and geopolitical events to make informed decisions about their investments.
As the situation evolves, the UAE Gold Prices and investors worldwide are likely to remain attentive to any shifts in economic indicators and central bank communications that may impact gold’s performance.