On Thursday morning, UAE gold prices maintained stability following a dip of AED2.75 per gram, which marked a two-week low on the previous Wednesday evening. According to data from the Dubai Jewellery Group, 24K gold was traded at AED247.5 on Thursday morning, in contrast to the AED250 at the market’s opening on Wednesday. Additionally, other gold variants such as 22K, 21K, and 18K were trading at AED229.25, AED221.75, and AED190.0 per gram, respectively.
The decline in gold prices on Wednesday was attributed to the strengthening of the US dollar, with spot gold slightly down at $2,042.99 per ounce on Thursday morning. Analysts, including Rania Gule, a market analyst at XS.com, noted that gold turned bearish amid a cautious market environment and faced selling pressure as investors reassessed their expectations for a Federal Reserve interest rate cut in March.
Gule highlighted that the lack of crucial information about interest rate cuts from Federal Reserve officials in the FOMC meeting minutes weakened gold’s attractiveness in the short term, supporting the strength of the US dollar and Treasury yields. She further stated that the reduced likelihood of a short-term interest rate cut might weaken gold’s attractiveness in the near term, particularly after Federal Reserve Chair Jerome Powell mentioned in the recent monetary policy statement that interest rate cuts would be a topic for future discussion, causing market mood swings and high volatility.
Vijay Valecha, Chief Investment Officer at Century Financial, added from a technical perspective, the recent setback near the all-time high closing, approximately in the $2,077-2,078 range, and the subsequent decline should alert cautiousness among bullish traders.