Dubai: Gold has dropped to its lowest level in months, losing nearly Dh10 per gram in value in less than a week – and proving predications wrong that a Donald Trump win would increase safe haven demand.
As of 8pm on Monday, 24 karat was trading in Dubai at Dh148.25 per gram, down by a little over Dh9 from Tuesday, when the precious metal rallied in the wake of Trump’s victory. Earlier in the day, 24K traded as low as Dh147.50 per gram.
Spot gold dropped 0.2 per cent at $1,223.51 an ounce by 4.31pm, Dubai time, according to a Reuters report. Gold’s recent decline is said to be the lowest in five months, triggered by the rise in the US dollar and heightened inflationary fears.
“Gold prices have largely settled after the US election results, with the expectation that under President Trump’s leadership, the US Federal Reserve will increase interest rates due to fear of inflation,” Karim Merchant, group CEO and managing director of Pure Gold Jewellers, told Gulf News.
Ole Hansen, head of commodity strategy at Saxo Bank, said that the combination of increased fiscal spending and tax cuts in the US has lifted inflation expectations. Trump has recently pledged to set aside $500 billion to bankroll infrastructure projects.
“A Trump victory had – wrongly, it turns out – been expected to lift gold and hurt growth-dependent commodities such as industrial metals,” said Hansen in his research note.
“That assumption turned out to be completely wrong as the pre-election focus had been more on Trump’s personality rather than the market implications of his stated policies.”
Gold Rate: To keep up to date with gold prices, go to our gold rate page.
Currency Rate: To keep up to date with latest exchange rates, go to our currencies page.
