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Gold rates plunge below $1,300 an ounce

Jewellery pieces in UAE lose shine, with 24K losing Dh1.25 per gram in value overnight

Image Credit: Clint Egbert/Gulf News
A strong US dollar is taking a toll on gold prices.

Dubai: Gold jewellery prices in the UAE lost some shine on Tuesday as the bullion made a turnaround, plunging below $1,300 an ounce.

A stronger US dollar is apparently taking the spotlight away from the bullion, with the price of 24-karat gold in Dubai falling to Dh156.50 per gram on Tuesday, down by Dh1.25 from the previous day’s closing rate.

Other popular jewellery pieces, such as 22K and 21K also dropped to Dh147 and Dh140.25 per gram respectively. Buyers of 18K gold will also see prices now trading lower at Dh120.25 per gram.

Gold hit more than $1,303 an ounce on Monday but retreated the next day as the US dollar rose against other currencies. As of Tuesday afternoon, spot gold dropped 0.45 per cent to $1,287.70.

“The greenback is rising to the top of the heap as the US short rates have risen to new highs,” said Saxo Bank’s John Hardy in a note on Tuesday.

The dollar’s rise is in anticipation of US President Donald Trump’s nominee for the next US Federal Reserve chair. It is also a result of increased speculation that the Fed will increase the rates before year-end.

"A resilient dollar and rising interest rates are all impacting gold negatively, while the fragile geopolitical mosaic is offering an element of support," Reuters quoted INTL FCStone analyst Edward Mier as saying.

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