Stock UAE Gold
As gold prices continued to plunge, buyers are expected to take advantage Image Credit: Clint Egbert/Gulf News

Dubai: As gold prices continued to plunge, buyers are expected to take advantage of the exceptionally low prices as the yellow metal hit a fresh new two-and-a-half-year low on Monday.

In the UAE, the cost of 24-karat gold was at Dh199.50 per gram on Monday. Meanwhile, the price of 22-karat gold fell to Dh187.25 per gram, 21-karat to Dh178.75 and 18-karat to Dh153.25 in the UAE. Check the latest gold rates here.

Gold History
Gold rates seen in the past 10 days in the UAE, and globally. Image Credit: Dubai Gold and Jewellery Group

Gold prices were primarily pulled down by a firmer US dollar as major central banks adopted an aggressive stance on interest rates to tame inflation.

Gold down 1 per cent, lowest level since April 2020

Globally, prices fell as much as 1 per cent earlier in the session to hit $1,626.41, their lowest level since April 2020. US gold futures - indicative of near-term market prices - fell 0.6 per cent to $1,645.00.

The US dollar index, which gauges the greenback versus six peers, scaled a fresh peak since 2002 boosted by a plunge in British sterling.

"It's very difficult to construct a bullish case for gold, not until we see a pivot with the US, especially with (other) central banks tracing up with the Fed as well," said City Index analyst Matt Simpson.

Global recession becomes a reality

When the recession becomes a reality, there's a chance there for gold to get its safe-haven status back as the US won't be hiking anymore, Simpson added.

The US central bank and a number of other major central banks raised interest rates last week, triggering concerns over its impact on growth.

Stock UAE Gold
When the recession becomes a reality, there's a chance there for gold to get its safe-haven status back.

Additionally, higher US interest rates dull the zero-yielding bullion's appeal while bolstering the dollar in which gold is priced.

Gold down 20 per cent from highs, silvers drops too

Gold prices have fallen more than 20 per cent since scaling above the key $2,000 per-ounce mark in March.

If not gold, buyers can instead opt for silver. Silver prices shed 1.6 per cent to $18.54 per ounce, having earlier fallen to its lowest in more than two weeks. 

- with added inputs from Agencies