Dubai gold prices: Slight drop as fed comments and US-Iran talk take centerstage
Prices of yellow metal have eased by Dh2.5 as 24-karat gold trades at Dh523.50
Dubai: Gold prices in the UAE have seen a slight drop overnight as global traders turn cautious monitoring progress in talks between the US and Iran and comments by Federal Reserve officials.
Prices of the yellow metal have eased by Dh2.5 as 24-karat gold trades at Dh523.50 versus Dh526 on Monday. 18-karat gold continues to trade below Dh400 at Dh398.50. Whereas 22-karat gold is currently priced at Dh 484.75 versus Dh487 yesterday.
As for bullion, that is priced at $4,342 an ounce, wiping out a modest rise from the session before. Several Federal Reserve officials have expressed inflation concerns since the central bank unanimously approved its first rate increase in three years last week.
Markets are also watching a fresh push toward diplomacy aimed at ending the US-Iran conflict. President Donald Trump described a meeting between US officials and Iranian representatives in New York as "very good," reviving faint hopes for a diplomatic exit.
Oil is setting the terms for gold
Oil continued its slide following Trump's latest remarks, along with reports that Saudi Arabia plans to bring its East-West pipeline back online within days, letting Riyadh resume routing crude around the Strait of Hormuz. West Texas Intermediate has now dropped more than 10 per cent since the close last Tuesday.
Gold has been reacting to recent oil price swings as investors gauge whether high energy costs will sustain enough inflationary pressure to push the Fed toward further rate hikes. Higher rates tend to weigh on bullion since it generates no yield.
According to some analysts that Bloomberg spoke with, gold is currently stuck between a rock and a hard place. "Gold remains caught in a tug-of-war between safe-haven demand and rising-rate pressures,” and likely to be sensitive to headlines around oil and interest rates in the near term, said Priyanka Sachdeva, an analyst at Phillip Nova Pte Ltd.
Spot gold rose 0.06 per cent to $4,342.35 an ounce at 9:30 a.m. in Dubai. Silver rose 0.78 per cent to $66.49 an ounce, after gaining 1.6% the day before. Platinum and palladium were also lower. The Bloomberg Dollar Spot Index, a gauge of the US currency, was 0.1 per cent higher, after rising for the previous three sessions.
