Gold prices hit a fresh record high in Dubai, inching closer to an unprecedented level of Dh450 per gram.
As per Dubai Jewellery Group data, 24K was selling at Dh444.0 per gram while 22K hitting an all-time high of Dh411.25 per gram. Similarly, 21K and 18K were selling at Dh394.0 and Dh338.0 per gram, respectively.
Spot gold was trading at $3,683.61 per ounce, up 0.10 per cent at 9.13am UAE time, due to the weakening of the US dollar and expectations around interest rate cuts by the Federal Reserve on Wednesday.
Ipek Ozkardeskaya, senior analyst at Swissquote Bank, said the US dollar is under pressure; therefore, gold and silver are pushing higher.
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“On the Fed and rate cuts, many expect a total of 100 basis points over the next four meetings… Beyond the policy rate decision, we’ll also get an update on the so-called dot plot, giving insight into Fed members’ expectations beyond this month. Many analysts think there could be four 25-bp cuts on the horizon in the coming months,” Ozkardeskaya said.
Chris Weston, head of research at Pepperstone, said the market has pushed gold to all-time highs for a reason, and while the exact reason could fall on any one of many macro debates and concerns being posed by market players, the fact that gold is uncorrelated from the S&P500 and US Treasuries and is a portfolio hedge that is working well makes the investment case highly attractive.
“The fact that gold has been so strong, the pullbacks limited and contained, and the rate of change has picked up also brings in a lot of systematic buyers, and we can’t dismiss the importance of the flow-based effects pushing gold higher. Of course, the Fed meeting does pose risk to gold positioning, but the risk to US growth is skewed to the downside, and the market is sensing a growing risk that the Fed has miscalculated its views on economics and is progressively behind the curve on policy,” said Weston.
