UAE Gold Prices Plummet by Nearly 3 Dirhams per Gram as US Federal Reserve Pauses Rate Hikes
Gold prices in the UAE experienced a significant drop on Thursday morning following the US Federal Reserve’s decision to pause rate hikes. Data from the Dubai Jewellery Group revealed that the price of 24K gold opened at Dh234.25 per gram, compared to the previous night’s close of Dh237.0 per gram, representing a decrease of Dh2.75 per gram. Similarly, 22K, 21K, and 18K gold also started the day lower at Dh216.75, Dh209.75, and Dh180.0 per gram, respectively.
At 9:18 am UAE time, spot gold was trading in negative territory at $1,931.98 per ounce. The Federal Reserve opted not to raise interest rates during its recent meeting, although analysts anticipate further rate hikes later in the year, potentially reaching a range of 5.50-5.75 percent by the end of 2023.
The decline in gold prices is expected to boost demand for the precious metal and its jewelry in the UAE. Century Financial, a Dubai-based financial services provider, noted that a break below the $1,930 mark could lead to corrections towards $1,912, followed by $1,890.
Bas Kooijman, CEO and Asset Manager of DHF Capital, highlighted the value of the UAE’s precious metals market, including gold, jewelry, gold bars, and silver. In 2020, it was estimated to be worth Dh8.52 billion, and it is projected to reach Dh13.21 billion by the end of the decade, with a compound annual growth rate of 3.66 percent through 2030.