Why Dubai gold price is cheaper this week
Dubai-UAE (Sept 1) Gold has lost about more than Dh1 in value per gram since the beginning of the week, as speculations about an interest rate increase in the United States have again intensified.
The precious metal declined to a two-month low on Wednesday following the release of the American employment data that consequently triggered a rise in the US dollar.
As of 2:40 pm on Thursday, 24-karat gold was trading at Dh158.50 per gram. Although it remained unchanged from Wednesday's closing rate, 24K is now about Dh1.50 cheaper when compared to Sunday’s price. The price of 18K also remained unchanged on Thursday at Dh121.75, but is still Dh1.25 cheaper when compared to the prices during the beginning of the week.
Spot gold dropped on Wednesday to its lowest level since June 24 at $1,304.91 an ounce, according to Reuters. The yellow metal was trading at $1,309.60 an ounce at 1400 GMT, down 0.1 per cent.
Karim Merchant, CEO and managing director of Pure Gold Jewellers, said the price of gold slipped as interest rate increase has again come into play.
“Gold prices have fallen in fear of Fed decision to increase interest rates. With increasing interest rate, the opportunity cost of holding [gold] increases, too,” Merchant told Gulf News.
Just a week earlier, the precious metal was already showing some sign of weakness as investors kept an eye on US Federal Reserve chair Janet Yellen’s speech at the annual economic forum in Jackson.
Yellen hinted that there is now a stronger case for another interest rate increase as the US economy is nearing inflation and employment targets.