(MENAFN- Khaleej Times) Gold plunged more than Dh3 per gram in the UAE on Wednesday morning as global prices dropped ahead of the US federal Reserve's policy decision on interest rates.
The Dubai Jewellery Group data showed a 24K variant of the yellow metal trading at Dh239.5 per gram at the opening of the markets on Wednesday as compared to last night's close of Dh242.75, down by Dh3.25 per gram. Similarly, 22K, 21K and 18K also opened lower at Dh221.75, Dh214.5 and Dh184.0 per gram, respectively.
Spot gold fell 0.36 per cent to $1,976.74 per ounce by 9.10 am UAE time. The precious metal touched the $2,000-an-ounce mark last week due to fears about the escalation of conflict between Palestine and Israel.
Alex Kuptsikevich, senior market analyst at the FxPro, said corrective sentiment has intensified near the $2,000 psychologically important level as some speculators rush to take profits from the roughly $200 rally from the $1,810 level reached on October 6.
“Technically, gold remains in the oversold territory. And all the while, the price has been moving higher. At the beginning of last week, a brief dip below this line did not trigger a significant correction, and we saw a quick return of buyers towards the end of the week, pushing the price to new local highs,” he said.
Gold broke through $2,000 three times over the last three years, and each time, it has rallied to $2,070, followed by a pullback. In 2020 and 2021, gold was pushed back below $1,800; in 2022, the price came close to $1,620. A retreat in September took the price to $1,810 but quickly reversed to the upside.
Kuptsikevich said attractive yields on government bonds justify selling gold in the current circumstances.“It shows increasing signs of peaking, which could trigger a flow of active capital out of gold and into bonds. This is doubly true as long as there is no real risk of default on US and major eurozone government bonds.”
ALSO READ:
UAE: Gold jewellery loses shine as demand plunges 15% in Q3
UAE: Gold prices slip in Dubai as precious metal drops below $2,000 per ounce
MENAFN01112023000049011007ID1107353923
Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.