Gold prices in Dubai saw a decline in early trading on the first day of the week following significant gains in the previous week.
As of 9 am, the 24K variant of gold was trading at Dh288.75 per gram, down from Dh289.25 at the weekend’s close. Other gold variants also opened lower: 22K at Dh267.25, 21K at Dh258.75, and 18K at Dh221.75 per gram. The yellow metal had surged nearly Dh4 per gram in the last two trading days of the previous week. On the global stage, gold remained steady, trading at $2,384.69 per ounce.
“We’ve seen some selling of gold in early Asia trade today, but after a solid 2.8 per cent rally last week, the gold bulls really needed follow-through selling in the USD to push the price into $2,400,” said Chris Weston, head of research at Pepperstone.
“The tailwinds do suggest pullbacks on the day should be limited to $2,365, but with Jay Powell testifying to the House on Tuesday and US core CPI on Thursday, gold traders do need to navigate some big event risk this week.”
The main driver behind the gold price increase has been the buying activity in the US bond market. US 2-year Treasury yields fell by 15 basis points to 4.60 per cent last week, breaking through the 4.85 per cent to 4.65 per cent range that had persisted since mid-June.
“We can add in the idea that gold may start to get additional love, should we see evidence that the Republicans could surprise current expectations and take the House, which would give them the ability to extend the 2017 Tax Cut and Job Act in 2025, which along with other measures could see the US fiscal deficit increase by a further $1.5 trillion-plus – again, a factor which could take time to play out. Also, Freeport McMoRan cutting gold production guidance has been a bullish factor, in what is already a tight market,” added Weston.
