24K gold in the UAE slipped to Dh519.25 per gram on Wednesday morning as Treasury yields and Middle East tensions kept pressure on prices, analysts say, Gold prices continued their downward trend as the precious metal lost over Dh3 per gram at the opening of the markets on Wednesday.
According to Dubai Jewellery Group data, the 24K gold price slipped to Dh519.25 per gram on Wednesday morning, down from Dh522 per gram at the close of the markets on Tuesday. It has lost nearly Dh39 per gram in 9 days.
Similarly, 22K, 21K, 18K, and 14K gold prices fell to Dh480.75, Dh461.0, Dh395.0 and Dh308.25 per gram, respectively.
Spot gold fell below $4,400, trading at $4,304 per ounce, losing approximately one per cent in early trade.
Simon-Peter Massabni, head of business development at xs.com, said downward pressure on gold returned amid a renewed strong impact from high Treasury yields, which continue to impose a high opportunity cost that hinders gold’s recovery at the pace of its recent upward trend.
“The return of skirmishes in the Middle East, along with worsening pessimism regarding the future of Federal Reserve monetary policy for the remainder of this year, kept yields at their high peaks,” he said.
Following the pessimistic statements by Kevin Warsh at Jackson Hole on Friday, the market returned to favour more pessimistic paths for interest rates, with the probability that the Fed will raise rates by more than half a percentage point standing at nearly 47 per cent according to CME FedWatch Tool figures.
Warsh generally explained that inflation risks remain high and that monetary conditions are not tight enough, which was sufficient to revive the strong negative impact of high yields.
Massabni said this narrative also worsened with renewed skirmishes between the US and Iran, as the former targeted two rocket launchers on Lark Island.
Source: Khaleejtimes
