Gold price decline slows in Dubai ahead of UAE, US interest rate cut tonight
Bullion back at at $4,000-mark as dip-buyers return ahead of expected Fed easing
Dubai: After three volatile sessions, gold prices steadied on Wednesday, with Dubai’s 24-karat rate settling at Dh483.50 by Monday evening, from Dh478.50 per gram yesterday. The much-popular 22-karat edged up to Dh447.75, from Dh443.00 on Tuesday.
Jewellers said demand picked up as retail investors viewed the dip as an opportunity to enter before an expected US interest rate cut. Globally, bullion rose by nearly 1 per cent to $4,005 an ounce after losing more than 4% over the past three sessions.
Traders are positioning for a 25-basis-point cut from the Federal Reserve later today. While Chair Jerome Powell is unlikely to offer much forward guidance, lower borrowing costs generally support non-yielding assets such as gold.
The metal’s recent retreat followed a torrid rally that lifted it to a record above $4,380 an ounce last week. Technical indicators had shown that ascent had run too far, too fast, a move coinciding with reduced haven demand amid signs of progress in US-China trade relations.
With Donald Trump and Chinese counterpart Xi Jinping due to meet on Thursday, the US president told reporters he expects that there will be “a very good outcome for our country and for the world.” The prospect of easing geopolitical tension added to the profit-taking pressure earlier in the week.
Even after the correction, gold remains up nearly 50% this year, underpinned by strong central-bank purchases and what analysts call the “debasement trade” — investors seeking refuge from growing fiscal imbalances by moving out of sovereign bonds and currencies.
