Dubai: Gold prices plunge further, losing over Dh11 per gram
Gold prices plunged further on Monday afternoon, taking the day's drop to over Dh11 per gram.
The Dubai Jewellery Group data showed 24-karat trading at Dh389 per gram, down from Dh400.5 per gram at the close of the markets over the weekend. It was trading at Dh395.25 per gram when markets opened at 9am UAE time.
Similarly, 22-karat, 21-karat and 18-karat slipped to Dh360, Dh345.25 and Dh295.75 per gram, respectively.
Spot gold fell to $3,234 per ounce, down 2.7 per cent, at 5pm UAE time as the precious metal lost its appeal as a safe haven due to US-China temporarily agreeing to slash tariffs in order to defuse trade war.
Vijay Valecha, chief investment officer of Century Financial, said gold's Friday rally was short-lived as prices stuck to intraday losses through the Asian session on Monday, and the latest optimism over a US-China trade deal undermined demand for traditional safe-haven assets.
'The US and China will temporarily lower tariffs on each other's products… in a move to cool trade tensions and give the world's two largest economies three more months to resolve their differences,' he said.
The combined 145 per cent US levies on most Chinese imports will be reduced to 30 per cent including the rate tied to fentanyl by May 14, while the 125 per cent Chinese duties on US goods will drop to 10 per cent, according to the statement and officials in a briefing Monday.
'This, along with the Federal Reserve's pause on rate cuts, assisted the US dollar to stand firm near a multi-week top, exerting pressure on the commodity.'
On the geopolitical front, Valecha added that risks have shown tentative signs of easing.
Russian President Vladimir Putin has agreed to hold direct talks with Ukrainian President Volodymyr Zelenskyy on May 15, without preconditions. Meanwhile, Hamas announced plans to release Edan Alexander, the last known American hostage held in Gaza, and confirmed it will engage in direct discussions with the US aimed at achieving a ceasefire and resuming humanitarian aid.
'Looking ahead, the spotlight shifts to upcoming US inflation data and a key speech from Federal Reserve Chair Jerome Powell on Thursday. These events are likely to offer fresh insights into the Fed's monetary policy path and could play a pivotal role in shaping gold's trajectory in the near term,' added Valecha.
He added that the yellow metal could test the psychological $3,200 level, followed by the $3,163 level. Resistance can be seen at $3,300, and any recovery above this level can solidify bullish momentum.
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