Dubai gold rates: 24K at Dh504.25, 22K at Dh467, while 14K remains below Dh300.
Dubai: Gold prices edged higher on Monday as traders scaled back expectations of an interest rate increase by the US Federal Reserve later this month, following comments from Fed Chair Kevin Warsh that suggested policymakers could hold rates steady at their upcoming meeting.
Market expectations of a quarter-percentage-point rate hike fell to below 20 per cent after Warsh’s remarks were interpreted as signalling a possible pause in monetary tightening.
Gold typically faces pressure when interest rates rise because the precious metal does not offer interest or yield, making income-generating assets more attractive to investors.
In the UAE, gold prices increased by around Dh2 to Dh3 per gram during early Monday trading.
Dubai gold rates on Monday:
- 24-karat gold: Dh504.25 per gram
- 22-karat gold: Dh467 per gram, up from Dh464.75 in the previous session
- 14-karat gold: Dh299.25 per gram, remaining below the Dh300 mark
A stronger-than-expected US inflation reading last week had initially raised expectations of further Federal Reserve rate increases, supporting the dollar. However, Warsh’s latest comments dampened those expectations and interrupted the greenback’s rally.
Gold also drew support from a selloff in technology stocks amid growing concerns about the artificial intelligence investment boom. Meanwhile, a rally in government bonds pushed yields lower, making non-yielding assets such as gold more attractive.
The precious metal has remained above the psychologically important $4,000-per-ounce level since August, supported partly by demand for safe-haven assets.
That demand has helped stabilise prices following a sharp, conflict-driven downturn that pushed gold into a bear market earlier this year.
Investor interest in gold-backed exchange-traded funds (ETFs) has also strengthened, with the funds recording inflows for 13 consecutive weeks.
Despite the recent recovery, bullion remains approximately 20 per cent below its level when the US-Iran conflict began in late February.
Analysts expect gold to face continued pressure in the near term, as markets still anticipate the possibility of another US interest rate increase before the end of the year.
At 9.30am Dubai time, spot gold was trading 0.42 per cent higher at $4,177.78 an ounce, while silver gained 1.31 per cent to $57.56 an ounce.
Platinum and palladium also advanced.
Meanwhile, the Bloomberg Dollar Spot Index, which measures the US currency against a basket of major currencies, slipped 0.1 per cent after declining 0.3 per cent the previous week.
