Gold prices in Dubai took a sharp dive of nearly two dirhams per gram as markets opened on Thursday, influenced by the uncertainty surrounding the US debt ceiling situation. The drop in global rates prompted investors to reevaluate their positions, leading to a decline in the price of gold.
According to data from the Dubai Jewellery Group, the opening rate for 24K gold stood at Dh237.25 per gram, a noticeable decrease from the previous night’s closing rate of Dh239.0. Similarly, other variants of the precious metal also experienced declines, with 22K opening at Dh219.5, 21K at Dh212.5, and 18K at Dh182.25 per gram.
At 9:30 am UAE time, spot gold was trading at $1,957.48 per ounce, representing a decrease of 0.14 percent. Despite recent attempts at a recovery, gold’s upside potential has been curbed by a stronger US dollar and higher US Treasury yields. These factors appear to be overshadowing the safe-haven appeal of gold amid concerns about the US debt ceiling.
Yeap Jun Rong, a market analyst at IG, noted that gold has been struggling to regain momentum after a previous sell-off. The ongoing strength of the US dollar and rising Treasury yields have limited the upward movement of gold prices. Consequently, the uncertainty surrounding the US debt ceiling situation has failed to stimulate significant safe-haven flows.
On Wednesday, US Treasury Secretary Janet Yellen emphasized that early June remains the deadline for a potential debt ceiling default. She also stated her intention to provide Congress with an update on government finances in the near future. In a positive development, negotiators for Democratic President Joe Biden and top congressional Republican Kevin McCarthy engaged in what both sides described as productive talks on Wednesday. Their objective is to reach a mutually beneficial agreement to raise the United States’ $31.4 trillion debt ceiling and avert a catastrophic default.
