Gold prices in the United Arab Emirates (UAE) have experienced a notable increase while global rates display a slight decline amidst geopolitical tensions and uncertain economic forecasts.
Throughout the past week, gold prices have notably steadied around the $2,280 threshold. However, on Tuesday, there was a marginal downturn in gold prices globally, attributed to geopolitical uncertainties and lingering doubts regarding a ceasefire in the Middle East. The prevailing sentiment in markets suggests anticipation of a potential interest rate cut by the Federal Reserve later this year, further contributing to the fluctuation in gold prices.
The ongoing ambiguity surrounding the ceasefire in the Middle East has left investors cautious, as previous escalations in conflict have driven up demand for safe-haven assets like gold. This surge in demand propelled gold prices to a record high of $2,431.29 on April 12th.
In the UAE, gold prices have seen a notable increase. 24-carat gold climbed to AED281.25 per gram, while 22-carat gold reached AED260.50. Similarly, 21-carat gold saw a rise to AED252, with 18-carat gold priced at AED216.
Globally, spot gold experienced a minimal decline of 0.06 percent, settling at $2,322.56 per ounce as of 5:14 GMT, following a previous session where it rose by over 1 percent. Meanwhile, U.S. gold futures witnessed a marginal decrease of 0.01 percent, reaching $2,331.0.
Federal Reserve Interest Rate Outlook
Analysts have observed the gradual establishment of a support base for gold prices around the $2,280 mark over the past week, buoyed by statements from Federal Reserve officials hinting at a potential interest rate cut in the future.
Federal Reserve Bank of New York President John Williams indicated on Monday the possibility of a forthcoming interest rate reduction, although he refrained from specifying a timeline, citing the economy’s movement towards better equilibrium.
Currently, traders are pricing in a 64 percent probability of a Fed interest rate cut in September, according to CME’s FedWatch Tool. Lower interest rates typically enhance the appeal of holding gold, especially given its status as a non-interest-bearing asset.
Other Precious Metals
In addition to gold, other precious metals witnessed varied movements. Spot silver experienced a 0.50 percent decrease, settling at $27.32 per ounce, while platinum recorded a 0.93 percent increase, reaching $963.30. Conversely, palladium saw a modest increase of 0.24 percent, settling at $980. Analysts have noted that China’s scrappage scheme might potentially boost electric vehicle sales, subsequently augmenting the secondary palladium supply.