After dropping by Dh2 per gram on Monday, the price of gold in the United Arab Emirates (UAE) increased by more than Dh1 at the start of trading on Tuesday.
According to data from the Dubai Jewellery Group, 24K traded for Dh245.25 per gram on Tuesday morning, down from Dh244.0 per gram at the close on Monday. The other varieties of yellow metal also opened higher. The price per gram for the 22K was Dh227.0, the 21K was Dh219.75, and the 18K was Dh188.5.
At 9.35 a.m. UAE time, spot gold was up 15% at $2,028.25 an ounce, having fallen as low as January 25 during the previous session.
According to Rania Gule, a market analyst at XS.com, the price dropped on Monday due to positive non-farm payroll data for January in the US.
The markets, she continued, were pricing in expectations that the Federal Reserve will maintain interest rates at the current level, which is expected to be between 5.25 and 5.50 percent, at the March policy meeting.
“The positive employment market data strengthens the case for keeping interest rates higher until the end of spring this year. Bright prospects for demand are suggested by the high average wage paid by US companies and the robust labor demand. This also indicates that the current inflation environment will persist, necessitating the maintenance of high interest rates to avert further increases, the speaker continued.
Gule continued, “The Dollar Index and expectations for US bond yields have improved significantly, despite the pressure on gold prices.”
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