Dubai gold prices traded higher on Tuesday morning after record lows earlier in the month, with the metal gaining Dh22.5 in a single week.
The 24K variant of the precious metal was trading at Dh495.75 per gram at the open of the markets on Tuesday, down from Dh497.25 per gram at the market close a day before. The other variants, 22K, 21K, 18K, and 14K, were lower at Dh459, Dh440.25, Dh377.25, and Dh294.25, respectively.
The global spot gold price was up 0.21 per cent at $4,114.53 per ounce as of 9:05am UAE time. Silver was up 0.76 per cent at $53.13 per ounce.
Stay up to date with the latest news. Follow KT on WhatsApp Channels.
“If we continue to see a situation where the US does not want to escalate the conflict in the Middle East and oil prices are reversing as a result, that’d be very beneficial for gold because of its impact on the dollar, inflation and interest rate expectations,” Kyle Rodda, senior financial market analyst at Capital.com, told Reuters.
US President Donald Trump said on Monday he plans to hold off on new military strikes against Iran for the time being after appeals from countries in the region, including from Qatar’s prime minister in White House talks. Oil prices fell on Tuesday, extending losses from the previous day.
Although easing geopolitical tensions can reduce safe-haven demand, cheaper energy may also lower inflation expectations, weaken Treasury yields, and improve the attractiveness of non-yielding assets, said Naeem Aslam, chief investment officer of Zaye Capital Markets.
With traders expecting an 84 per cent chance that the US Federal Reserve will raise rates in December, as per CME’s FedWatch tool, it will increase the opportunity cost of holding non-yielding bullion, reducing its appeal to investors.
Investors now await the consumer price index report, due later in the day, followed by the producer price index data on Friday.
Source: Khaleej Times