24K gold prices in the UAE slipped to Dh519.25 per gram on Wednesday morning, as higher Treasury yields and ongoing Middle East tensions continued to weigh on prices, according to analysts.
Gold prices continued their downward trend, with the precious metal losing more than Dh3 per gram at the opening of markets on Wednesday.
According to Dubai Jewellery Group data, the 24K gold price fell to Dh519.25 per gram on Wednesday morning, down from Dh522 per gram at Tuesday’s market close. The price has dropped by nearly Dh39 per gram over the past nine days.
Similarly, prices for 22K, 21K, 18K and 14K gold also declined, falling to Dh480.75, Dh461.00, Dh395.00 and Dh308.25 per gram, respectively.
Spot gold fell below the $4,400 mark, trading at around $4,304 per ounce after losing approximately 1 per cent in early trade.
Simon-Peter Massabni, head of business development at XS.com, said renewed pressure from high Treasury yields was weighing on gold, increasing the opportunity cost of holding the non-yielding asset and limiting its recovery.
“The return of skirmishes in the Middle East, along with worsening pessimism regarding the future of Federal Reserve monetary policy for the remainder of this year, kept yields at their high peaks,” he said.
Following Kevin Warsh’s pessimistic comments at Jackson Hole on Friday, markets shifted towards a less favourable outlook for interest rates. According to CME FedWatch Tool figures, the probability of the Federal Reserve raising rates by more than half a percentage point stood at nearly 47 per cent.
Warsh said inflation risks remained elevated and monetary conditions were not sufficiently tight, helping revive the negative impact of higher yields on gold prices.
Massabni said the pressure was further amplified by renewed US-Iran tensions, after the US targeted two rocket launchers on Lark Island.
