UAE: Nearly one-year low in gold price, as the UAE’s gold price falls to Dh2 per Gram

UAE: Nearly one-year low in gold price, as the UAE's gold price falls to Dh2 per Gram
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On Thursday morning, gold prices in the UAE fell by more than Dh2 per Gram. This was a close-to-one-year low. According to data from Dubai Gold and Jewellery Group, 24K traded at Dh205.0 per kilogram on Thursday morning, compared with Wednesday’s close at Dh207.25 per kilogram. The yellow metal was also available in other forms, with 22K trading at Dh192.5 per kilogram, 21K trading at Dh183.75, and 18K trading at Dh157.5 Thursday morning.

Gold prices fell globally on Thursday morning, to their lowest level in almost a year. This was due to a rising US dollar and the prospect of higher interest rates by central banks to combat rising inflation. Spot gold fell 0.2% to $1,692.5 an ounce at 9.10 AM UAE time.

Dollar vs Gold

The dollar was at its lowest level in two decades, compared to its rivals. This made greenback-priced bullion less expensive for buyers of other currencies. On Thursday, the European Central Bank will increase interest rates for a first time in 11 year. This is a move that policymakers are increasingly likely to make as they fear losing control over runaway consumer price rises. Widely expected, the US Federal Reserve will raise interest rates by 75 basis point at its next policy meeting. Jeffrey Halley, Oanda’s senior market analyst, stated that if any asset class shouts that the risk sentiment rally might be very false dawn, it would be gold.

“After failing to rally on the weakness of the US dollar this week, it has slid further to its longer-term support overnight and today. It is not fair to say that the gold price action has been subdued. He said that it appears to be facing imminent material downside risks if we believe the technical picture.”

It is just above the $1,675 per ounce zone for longer-term support. If the price fails to rise above $1,675, it will signal a deeper move that targets the $1,450-$1,500 an ounce areas. “Gold has resistance at $1,720 and then $1,745, but now it is a triple top,” said Halley.

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