Gold prices showed a decline on Monday morning as investors awaited comments from the Chairman of the US Federal Reserve before the September meeting.
The 24K option opened trading at Dh533, which is lower than the Dh536.75 recorded on Friday. Over the past week, the yellow metal lost about Dh25 after reaching a three-month high. Among other varieties, such as 22K, 21K, 18K, and 14K, prices also decreased: Dh5493.75, Dh473.25, Dh405.75, and Dh316.50, respectively.
Globally, spot gold prices fell by 0.14 percent to $4,424.3 per ounce, while silver traded at $66.4 per ounce, showing an increase of 1.13 percent.
Analysts note that the recent rise in gold prices, which reached a three-month high of around Dh4,700 last week, has several aspects. Ole Hansen, Head of Commodity Strategy at Saxo Bank, stated that one of the factors is the renewed concern over the fiscal sustainability of the US and the dollar following the Treasury's decision to expand the repurchase of long-term government bonds. He emphasized that the signal itself was more significant than the actual volume of these operations.
Hansen explained that this contributed to the resurgence of the devaluation narrative, which supported gold for most of the last two years. He added that gold is performing strongly despite higher bond yields and inflation remaining significantly above the Federal Reserve's target level. According to him, besides constant demand from central banks, this indicates that investors are increasingly distinguishing between high yields caused by monetary policy tightening and high yields reflecting concerns about fiscal sustainability and government borrowing needs.