Gold prices fell further in the UAE on Friday, dropping by nearly Dh3 per gram at the start of trading.
The 24K variant of the yellow metal fell by Dh2.75 per gram, trading at Dh282.75 per gram, down from Dh285.5 per gram at the market close on Thursday.
The yellow metal is falling due to stronger-than-expected US economic data, which is pushing the US Treasury to raise interest rates while also lifting the US dollar against most other currencies.
“With the US economy performing exceptionally well and inflationary pressures proving more persistent than expected, the Federal Reserve will likely maintain its restrictive policy stance for the foreseeable future. This scenario of higher interest rates for an extended time may limit gold’s near-term upside potential, assuming risk aversion remains low,” said Diego Colman, contributing strategist at dailyFX.
Investors have been advised to be cautious and wait-and-see, as commodity prices have been volatile due to a variety of global factors.
This year’s yellow rally was driven by central bank purchases and expectations that the US Federal Reserve would lower interest rates.
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