Gold prices have fallen by at least Dh10 since Monday, offering buyers some relief.
Dubai: Gold buyers in the UAE may find some relief on Thursday, with prices falling by at least Dh10 since the start of the week. Globally, the precious metal is reacting to a rebound in energy prices and stronger-than-expected US economic data released on Wednesday, which has increased expectations that the Federal Reserve could raise interest rates to tackle inflation.
In the UAE, 24-karat gold is trading at Dh517 per gram on Thursday, down from Wednesday’s opening price. Meanwhile, 22-karat gold is priced at Dh478.75 per gram, while 18-karat gold is trading at Dh393.50 per gram.
Tug-of-war in diplomatic dialogue
Gold was trading near $4,290 an ounce after falling 1.7% in the previous session. Oil prices, meanwhile, moved higher after Iranian President Masoud Pezeshkian struck a firm tone in his address to the United Nations, saying Tehran would not allow free passage through the Strait of Hormuz as long as sanctions and the US blockade remain in place.
The comments underline the challenges facing efforts to reach a peace agreement with Washington, even as both sides seek to restart negotiations this week.
Pezeshkian also said Iran remains open to negotiations but would not give in to threats. He reiterated that Tehran has no intention of developing nuclear weapons, while maintaining that the country would not give up its right to pursue nuclear technology for economic purposes.
His comments came a day after US President Donald Trump said his team had held “very good” discussions with Iranian representatives on the sidelines of the UN summit.
Gold down by a fifth since February
Gold has largely tracked expectations for US Federal Reserve policy in recent weeks as investors assess whether elevated energy prices could keep inflation high enough to prompt further interest rate increases.
Higher rates typically put pressure on bullion because the precious metal does not pay interest. Gold has fallen by roughly 20% since the US-Iran war began in late February.
“Since higher borrowing costs generally weaken the case for holding gold because the metal does not pay interest, its attractiveness as a hedge within a portfolio seems to be standing firm thanks to strong inflows into gold ETFs and demand from central banks, even though US real yields are rising and the strength of the dollar is limiting immediate gains,” said Vijay Valecha, Chief Investment Officer at Century Financial.
Spot gold is currently trading at $4,290.24 an ounce, up 0.18 per cent. Silver has slipped 0.5 per cent to $64.16 an ounce, while platinum and palladium also edged lower.
The Bloomberg Dollar Spot Index, which tracks the performance of the US currency, remained steady after four consecutive days of gains pushed it close to a two-month high.
