With the Iran-Israel ceasefire going into force Tuesday morning, gold prices fell even further when Dubai’s markets opened. From about Dh404 per gramme last night, the 24K version of the precious metal fell to Dh403.5 per gramme. 22K, 21K, and 18K also dropped to Dh373.75, Dh358.0, and Dh307.25 per gramme, respectively. The price of spot gold was down 1.19 percent, at $3,340.49 an ounce.
According to Osama Al Saifi, managing director for Mena at Traze, gold prices continued to decline. Safe-haven flows were overshadowed by the US dollar’s recent gain and the Fed’s continued hawkish posture.
A strong dollar may continue to put pressure on the yellow metal. The Federal Reserve’s forecasts from last week highlighted ongoing inflationary risks. Markets are preparing for more policy clarity as a number of Fed officials are scheduled to testify before Congress this week, including Chair Jerome Powell. He also mentioned that gold could continue to be vulnerable to changes in geopolitics.
Investor attention may continue to be on macro data even while geopolitical tensions in the Middle East and Eastern Europe are still high. Weekly unemployment claims and PMI readings may influence expectations on the rate of policy easing. Meanwhile, increased geopolitical risk might minimise the negative impact.
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