UAE: Gold prices steady ahead of Fed chairman speech

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Gold prices were stable globally but dropped slightly in the UAE at the opening of the markets on Wednesday ahead of the US Federal Reserve chairman Jerome Powell’s speech later this week.

Spot gold was trading steadily at $1,747.78 per ounce by 9.17 am UAE time.

In the UAE, 24K gold price opened at Dh211.5 per gram on Wednesday, down by Dh0.25 per gram. Among the other variants of the precious metal, 22K, 21K and 18K opened at Dh198.75, Dh189.75 and Dh162.5 per gram, respectively.

Edward Moya, a senior market analyst, Oanda, said gold got its groove back after the dollar plunged after a round of ugly US economic data suggests Powell won’t be able to stick to the aggressive tightening script for much longer.

“I don’t think anyone expects Powell to go Volcker on us and that has provided some support here for gold. Powell still needs to justify his hawkish stance at Jackson Hole, but it seems markets may not believe him,” he said.

Moya said the yellow metal looks like it is poised to stabilise above the $1,750 level before Powell's speech on Friday.

Vijay Valecha, chief investment officer, Century Financial, said investors are now gearing up for Fed Chair Jerome Powell’s speech at the annual Jackson Hole symposium later this week that could signal how high US borrowing costs may go. “Markets are now pricing in a higher chance of a bigger 75 basis point rate increase in September,” he said.

“Technically, gold failed to hold above $1,760.40, this indicates weakness in the instrument. The first support target is $1,727. If it fails to hold $1,727, it can further break into the main 50 per cent level at $1,709.10, followed by the support cluster at $1,696.10 to $1,694.50,” he added.