Dubai: Gold jewellery prices in the UAE soared to their highest level in weeks after the US Federal Reserve decided to leave its key interest rate unchanged and projected no adjustments this year.
The price of 24-karat gold jumped by nearly Dh4 to Dh159.75 per gram on Wednesday. Only a few weeks earlier, 24K was retailing at Dh156 per gram.
Other gold pieces have also seen a price surge, with the 22K now selling at Dh150 per gram, 21K at Dh143.25 and 18K at Dh122.75.
Spot gold jumped to $1,319.02, the highest price reached since February 28, according to Reuters.
“The precious metal witnessed a sharp rally in prices overnight as the FOMC (Federal Open Market Committee) came out with its most dovish policy shift in years,” Devesh Mamtani, head of investments and advisory for financial markets at Century Financial, told Gulf News.
“The Fed not only downgraded its growth and inflation forecasts for this year, but also withdrew any expectations of rate hike in 2019.”
UAE consumers enjoyed a momentary price relief recently when gold jewellery shed a whopping Dh6.50 in value per gram. The precious metal had lost its lustre due to waning demand, coupled with the strengthening US dollar.
But the latest Fed decision brought some shine back to the precious metal, and the trend is likely to continue.
“In the international markets this morning, the yellow bullion rose further by 0.5 per cent to $1,319 levels and may see further increase, as the US Treasury yields continue their break lower in the near term,” said Mamtani.