Dubai’s gold market kicked off Wednesday with a gleam, as prices climbed Dh2 per gram across various categories. This surge mirrored a global rise in gold value, which surpassed $2,400 per ounce.
The 24K variant, the most coveted, opened at Dh292.75 per gram, a significant increase from Dh290.75 recorded at Tuesday’s closing. Similar trends were observed in other popular varieties: 22K traded at Dh271.25, 21K at Dh262.5, and 18K at Dh225.0 per gram.
This upward movement coincides with growing anticipation around key US economic data scheduled for release this week. These figures, including Q2 GDP growth estimates, personal spending and income data, and the June PCE price index, are crucial in determining inflation trends within the US. As the Federal Reserve targets a 2% inflation rate, the market heavily anticipates interest rate cuts starting in September.
“Gold prices are experiencing a well-deserved rise after a recent decline caused by a strengthening dollar,” said George Pavel, General Manager at Capex.com Middle East. “However, the market is bracing for potential volatility due to the upcoming US economic data release.”
Pavel further highlights the impact of the recent unexpected interest rate cuts by the Chinese Central Bank. While these cuts have brought a positive sentiment to China’s economy, they could potentially limit the upward trajectory of gold prices.
“The market will be closely watching economic indicators as they provide insights into inflation trends,” Pavel added. “Slower inflation and a cooling economy could fuel further momentum for gold’s rebound.”
Beyond these economic factors, global geopolitical tensions and the uncertainty surrounding the US presidential election, with speculation of Donald Trump re-entering the race, are also influencing the gold market. As consumer inflation expectations rise, this could strengthen the US dollar and impact gold prices in the short term.
