Gold prices fell on Friday en route to their worst week since late November, as safe-haven demand fuelled by Russia's invasion of Ukraine subsided.
In the UAE, the cost of 24-karat gold was at Dh234.25 per gram on Friday, down from Dh235.75 on Thursday. Check the latest gold rates here. Meanwhile, the price of 22-karat gold fell to Dh220 per gram, 21-karat to Dh210 and 18-karat to Dh180 in the UAE.
Globally, gold price slipped 0.4 per cent to $1,934.62 per ounce. US gold futures, indicative of future price movements, fell 0.4 per cent to $1,935.00.
"The Ukraine situation isn't as intense as it was, so the anxiety isn't really there to drive gold up as a safe-haven," said Matt Simpson, a senior market analyst at City Index. Russian troops appeared to stall in their advance on Ukrainian cities as the war entered its fourth week.
The US dollar firmed, pressuring greenback-priced bullion, while stock markets took a breather after several days of sizeable gains.
Worst weekly drop
Gold prices have fallen about 2.6 per cent so far this week as investors priced in possibilities of aggressive interest rate hikes by the US Federal Reserve ahead of a policy decision on Wednesday.
The metal recovered a bit after the Fed said it was raising borrowing costs along expected lines, while acknowledging the challenges presented by soaring inflation.
However, "the combination of steeper interest rates over the course of the year and gold rejecting levels near the all-time high means that in the very short term, risks for gold are on the downside," said Michael McCarthy, chief strategy officer at Tiger Brokers, Australia.
Higher interest rates tend to raise the opportunity cost of holding non-interest paying gold.
China's intent to tackle COVID-19 with minimal impact to the economy and people's lives, and promise of further stimulus, have brought palladium bulls back to the table, Simpson said, after many sessions of volatility that saw platinum, palladium and key metals drop to technical support levels.
