Gold prices in Dubai have risen significantly, surpassing the 500 dirham per gram mark on Friday morning. This increase followed the release of weak employment data from the United States, which pushed the price of the precious metal above $4100 per ounce.
Gold Price Dynamics
At the opening of markets on Friday, the price of 24-karat gold was 503.5 dirhams per gram, higher than the 494.75 dirhams per gram recorded on Thursday. Thus, the price increased by 8.75 dirhams per gram. Additionally, spot gold rose by 1.5 percent to reach $4173 per ounce, while silver jumped three percent to $62.42 per ounce.
Expert Commentary on the Market
Petros Pancari, a senior dealer at Monaxa, explained the price increase by stating that the weak US employment report reduced concerns about another Fed rate hike. He noted that the 'Nonfarm Payrolls' figure was only 57,000 against an expected 114,000, indicating a sharp slowdown in hiring. Pancari added that this gives traders grounds to believe that the US Federal Reserve may maintain its current rate or even approach rate cuts if the labor market continues to weaken. A less aggressive Fed policy usually leads to lower Treasury yields and pressure on the dollar, which is favorable for gold. Although the unemployment rate improved to 4.2 percent, which is not yet a recession signal, the significant miss on job growth forecasts is enough to sustain buyer activity for gold and weaken the dollar.
Factors Influencing the Price
Simon-Peter Massabni, Head of Business Development at XS.com, stated that gold is trying to hold above the $4000 per ounce level. He also mentioned that this rise occurs against the backdrop of optimism regarding progress in high-level negotiations to implement the memorandum of understanding between the United States and Iran.