Dubai: The bullion slipped further on Tuesday, as market expectations on a couple more rate adjustments next year heightened.
In a little over one month, or since November 8 when prices surged, the precious metal registered a total loss of Dh20.25 per gram at the retail level, extending further bargain opportunities for gold bugs in the UAE.
As of 1.44pm, 24-karat gold was trading in Dubai at Dh137.75 per gram, down by .25 fils from Monday’s close and Dh20.25 from November 8. In Asian trade, spot price fell 0.2 per cent to $1,136.96 an ounce.
The metal’s latest decline has been attributed to Federal Reserve chair Janet Yellen’s positive comments about the United States labour market.
During her speech at the University of Baltimore’s commencement on Monday, Yellen said that the employment sector remains strong, with job creation continuing at a steady pace, layoff rates at low levels and job openings going up over the past couple of years.
“The short version of what I have to say is that while I expect workers will continue to face some challenges in the coming years, I believe, for two reasons, that the job prospects and career opportunities for new graduates at this time are very good,” Yellen said.
Karim Merchant, CEO and managing director of Pure Gold Jewellers in Dubai, said that Yellen’s comments further supported the view that there are enough valid grounds to implement more interest rate adjustments next year.
“Optimistic comments by [Yellen] increased the probability of further US interest rate hikes next year affecting gold price. US is showing signs of stability, hence, there is no grounds for gold to claim its status of safe haven at this point in time,” Merchant told Gulf News.
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