Gold prices drop, 24K opens at Dh240 per gram in Dubai

Gold prices drop; 24K opens at Dh240 per gram in Dubai.

DUBAI, TGO: Gold prices fell on Thursday, as US Treasury yields rose while investors opted for riskier assets amid a retreat in oil prices after the UAE said it would help increase oil production, making safe-haven bullion less appealing.

Spot gold was down 0.35 per cent at $1,983.43 per ounce at 9.50 am UAE time. The prices had slumped one per cent earlier in the session.

In the UAE, 24K was trading at Dh240.0 per gram at the opening of the market on Thursday morning as compared to Dh248.75 on Wednesday morning, according to the Dubai Gold and Jewellery Group data.

The 24K price recovered later yesterday and closed at Dh240.5 per gram. Among the other variants of the precious metal, 22K opened at Dh225.5 per gram, 21K at Dh215.0 and 18K at Dh184.25.

UAE Energy Minister Suhail Al Mazrouei said on Twitter late on Wednesday his country is committed to the existing agreement by the Organization of the Petroleum Exporting Countries and allies including Russia, together called Opec+, to ramp up oil supply by 400,000 barrels per day monthly following sharp cuts in 2020.

“The UAE believes in the value Opec+ brings to the oil market,” he said.

Naeem Aslam, chief market analyst at London-based AVA Trade, said given the circumstances, there are two essential denominators for gold prices: the current geopolitical tensions and the US Federal Reserve’s monetary policy. “Traders are widely expecting that the Fed will increase this month’s interest rate. Still, the probabilities of the Fed raising the interest rates aggressively are out of the window now purely because the Fed will soon be facing another major problem: stagflation. This means the odds are stacked in favor of a higher gold price than anything else,” added Aslam.