Precious Metal Dips in Opening Market Trade
United Arab Emirates – October 31, 2023
Gold prices in the United Arab Emirates experienced a minor dip at the start of the trading day on Tuesday, with the 24K variant of the precious metal trading at Dh241.5 per gram. This marks a slight decrease from the previous night’s closing price of Dh242.0 per gram. Other gold variations, including 22K, 21K, and 18K, also saw lower opening prices, trading at Dh223.5, Dh216.5, and Dh185.5 per gram, respectively, as reported by the Dubai Jewellery Group.
On the global stage, spot gold remained steady at $1,994.67 per ounce as of 9:20 AM UAE time. Gold prices slipped just below the critical $2,000 milestone, a move attributed to investors’ anticipation of central bank meetings, with a particular focus on the policy outlook of the US Federal Reserve.
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Vijay Valecha, Chief Investment Officer at Century Financial, noted that despite briefly crossing the $2,000 barrier on Friday, gold prices continued to hold onto their recent gains, thanks in part to geopolitical tensions in the Middle East, which tend to boost gold’s status as a safe haven asset.
However, Valecha also highlighted the potential impact of interest rate hikes by the US Federal Reserve on gold’s appeal. While gold is often considered a hedge against inflation, higher interest rates could reduce its attractiveness to investors. Currently, according to CME’s Fed Watch Tool, market participants are estimating a 96.1 percent probability that the interest rate will remain at its current levels.
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From a technical perspective, Valecha commented, “The price of gold is trading close to the $2,000/ounce mark and is still moving inside the bullish channel, suggesting that the bullish trend will continue, and we will likely reach our next major target at $2,020. As a result, the bullish trend scenario will continue to be active, and it may be preceded by a brief period of sideways fluctuation influenced by current stochastic negativity.”
Valecha emphasized the importance of gold holding above $1,982 for the expected upward trajectory to continue. The next major resistance point is projected at $2,040. The dynamics in global financial markets continue to play a critical role in shaping gold’s performance, as investors keep a close eye on central bank decisions and geopolitical events.
