Dubai: Gold's retail rates in Dubai inched down slightly on Thursday as investors anxiously await the upcoming meeting of the Federal Reserve in the United States to tackle the course of monetary policy.
The Federal Open Market Committee (FOMC) is due to meet for two days starting Tuesday next week, September 20, and is expected to make an announcement about the Fed’s decision on interest rates.
As of 12 noon, 24-karat (24K) gold was retailing at Dh160 per gram in Dubai, down by 50 fils from Wednesday’s closing rate. At the same time, the prices for 22K, 21K and 18K also dropped to Dh150.25, Dh143.50 and Dh123 per gram, respectively.
Analysts are leaning towards prices trending down over the next few days as the markets are buzzing with anticipation over the outcome of the FOMC talks which will continue to heap pressure on commodities.
“Markets are waiting as the FOMC meeting nears, to decide on interest rate increase. Gold is expected to become more volatile closer to the meeting date,” Karim Merchant, group CEO and managing director of Pure Gold Jewellers, told Gulf News.
The bullion had strengthened in the past week as a result of weak economic figures from the United States, with the prices returning to $1,336, the average price recorded after the Brexit vote on June 23.
Ole Hansen, head of commodity strategy at Saxo Bank, said he expects the precious metal to emerge between $1,334 and $1,328 an ounce. “ A break, however, would counteract the recent strength and could send gold back down to test the key support at $1,300,” Hansen noted in his latest analysis.
He agreed that the upcoming FOMC dialog will again attract some attention, adding that there is a likelihood that the rates will be increased. “Despite recent weakness in economic data, the FOMC may still opt to raise rates in order not to suffer too much of a credibility issue following recent hawkish statements,” Hansen added.
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