Gold prices in Dubai held steady during early trading on Wednesday following a slight dip of half a dirham per gram on Tuesday.
At 9 a.m. UAE time, the 24K variant of gold was priced at Dh280.75 per gram in Dubai. Meanwhile, 22K, 21K, and 18K were trading at Dh260, Dh251.75, and Dh215.75 per gram, respectively.
Spot gold, at the same time, was trading at $2,319.04 per ounce, marking a modest increase of 0.17 percent.
Terence Hove, a senior financial market strategist at Exness, noted that gold prices have been experiencing some pressure following a peak in early April, with a subsequent period of correction.
“The recent US Nonfarm Payrolls (NFP) data has fueled expectations of a potential interest rate cut by the Federal Reserve (Fed) sooner this year. Markets are now pricing in the likelihood of a rate cut as early as September,” Hove explained.
While anticipation of an easing cycle and lower interest rates could provide support for gold prices, Hove cautioned that the tone of comments from Federal Reserve members could sway market sentiment. A hawkish stance from the Fed could bolster the US dollar and weigh on gold.
Additionally, central bank gold purchases may offer some support to the precious metal, although recent data suggests a decline in purchase volumes, introducing some risks.
Hove also highlighted the geopolitical landscape in the Middle East as a potential source of volatility for gold prices. Escalating tensions could drive investors towards safe-haven assets, strengthening gold prices, while progress towards a ceasefire could exert downward pressure on the asset.
