Dubai: Gold prices rise to Dh392, recover in early trade after big drop
Gold prices increased at the opening of the markets in Dubai on Tuesday after losing over Dh11 in yesterday's session.
At 9am on Tuesday, the 24 karat traded at Dh392, recovering some of the losses recorded yesterday. Among the other variants, 22 karat, 21 karat and 18 karat were trading at Dh362.75, Dh348 and Dh298.25 per gram, respectively.
Spot gold was trading at $3,258.43 per ounce, up 1 per cent.
Precious metal plunged yesterday after the US and China announced a trade deal, prompting investors to move away from the safe haven commodity.
Analysts said positive trade developments reduced demand for safe-haven assets.
US-China trade tensions showed signs of easing following a major breakthrough in talks held in Switzerland. The two countries agreed to temporarily suspend tariffs. The 90-day pause provided further relief to global markets.
'There is some value-buying happening on gold at current levels which is helping to prop up the price, despite the generally better outlook for global growth with the US and China on better terms. The consolidation move in the dollar has allowed the gold price to make a mild push higher," said Tim Waterer, chief market analyst at KCM Trade.
Traders await the US Consumer Price Index report which is due today for fresh signals on the US Federal Reserve's monetary policy trajectory.
The market is expecting a 55-basis-point rate cut this year by the Fed, starting September.
'If the inflation data happened to produce a downside miss this could take some momentum away from the US dollar, which could see gold make forward progress," Waterer said.
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