Gold prices ease by Dh2.50 as 24-karat gold trades at Dh523.50 per gram.
Dubai: Gold prices in the UAE eased slightly overnight as global traders adopted a cautious stance while monitoring developments in US-Iran talks and comments from Federal Reserve officials.
The price of the yellow metal fell by Dh2.50, with 24-karat gold trading at Dh523.50 per gram, down from Dh526 on Monday. 22-karat gold is priced at Dh484.75, compared with Dh487 yesterday.
Meanwhile, 18-karat gold remains below Dh400, trading at Dh398.50 per gram.
Meanwhile, bullion is trading at $4,342 an ounce, erasing a modest gain recorded in the previous session.
Several Federal Reserve officials have raised concerns about inflation since the central bank unanimously approved its first interest-rate increase in three years last week.
Markets are also monitoring renewed diplomatic efforts aimed at ending the US-Iran conflict. President Donald Trump described a meeting between US officials and Iranian representatives in New York as “very good”, raising renewed hopes that diplomacy could offer a way out of the conflict.
Oil is setting the terms for gold
Oil prices continued to decline following Trump’s latest remarks, as markets also responded to reports that Saudi Arabia plans to bring its East-West pipeline back online within days. The move would allow Riyadh to resume routing crude around the Strait of Hormuz.
West Texas Intermediate has now fallen more than 10 per cent since the close last Tuesday.
Gold has been responding to recent swings in oil prices as investors assess whether higher energy costs could keep inflation elevated enough to prompt the Federal Reserve to raise interest rates further. Higher rates generally weigh on bullion because the precious metal does not generate a yield.
Some analysts cited by Bloomberg said gold is currently caught between competing forces. “Gold remains caught in a tug-of-war between safe-haven demand and rising-rate pressures,” said Priyanka Sachdeva, an analyst at Phillip Nova Pte Ltd. She added that gold is likely to remain sensitive to developments surrounding oil prices and interest rates in the near term.
Spot gold was up 0.06 per cent at $4,342.35 an ounce at 9:30am in Dubai. Silver rose 0.78 per cent to $66.49 an ounce, following a 1.6 per cent gain in the previous session.
Platinum and palladium also traded lower, while the Bloomberg Dollar Spot Index, a measure of the US currency, gained 0.1 per cent after rising for the previous three sessions.
