It was reported yesterday that gold prices in Dubai posted some gains- for the second consecutive day. This comes at a time in which interest rates has fallen.
Gold has increased by 0.75 fils since Sunday. 24 karat is currently traded at Dh150.50 per gram. Other prices include; 22 karat-Dh149.75 per gram, 21 karat-Dh143 per gram and 18 karat-Dh122.50 per gram.
The metal’s renewed strength might be contributed to the decline of the US dollar.
According to the CME Group FedWatch it has be stated that “the chance of a new rate adjustment has dropped from 24 per cent to only 12 per cent”.
A meeting is scheduled for today by the Federal Open Market Committee to discuss US monetary policy.
“Gold has always been sensitive to any discussions about possible interest rate increases. This is most likely because the precious metal is widely used in investment and jewellery, which can also be seen as an investment” according to CME Group in its research notes.
Karim Merchant (CEO and managing director of Pure Gold Jewellers) also said “Gold will remain under pressure until the FOMC has announced its decision on interest rates. But over the long term, gold will remain a preferred asset for investors”.
“While markets have majorly discounted the effect of Fed’s potential decision to increase interest rates, gold will be under pressure, at least in the short term. With the continued slow and questioned recovery of major global economies, gold will remain a favorite safe haven” Merchant.