Traders Monitor The Federal Reserve

Gold prices remain on a downward trajectory across global markets today. Traders are gauging the effect of a rising dollar and higher US Treasury yields. These factors heavily impact the Federal Reserve's long-term interest rate outlook. Spot gold hovered nervously around $4,140 an ounce during morning trading.  The US dollar came incredibly close to its strongest level of the year recently. A firmer greenback usually weighs heavily on commodities priced in dollars globally. In the UAE, shoppers are actively delaying their jewelry purchases. They anticipate a further slide in prices over the coming weeks. 

Retail Prices Drop Below Dh500

On Tuesday, 24-karat gold continued to trade below the Dh500 mark. Retailers priced the premium metal at exactly Dh496.75 per gram. Meanwhile, 22-karat gold is currently trading at Dh460 across local souks. The price for 18-karat gold slipped to Dh378 per gram.  Buyers can purchase 14-karat gold for Dh294.75 per gram today. Federal Reserve officials recently downplayed the likelihood of a near-term rate increase. However, markets still price in a 25 percent probability of higher borrowing costs. The central bank will meet later this month to discuss monetary policy. 

A Persistent Short-Term Downtrend

Minutes from the Fed’s September meeting will be released to the public tomorrow. Higher interest rates generally weigh on gold and other bullion assets globally. They make yield-generating assets such as US Treasuries much more attractive to investors. Chris Weston serves as Head of Research at Pepperstone.  He stated the short-term investment case for gold remains a massive challenge. "Rallies are quickly being sold, and sellers remain firmly in control," Weston explained. Gold declined by more than 6 percent last month amid inflation concerns.  Make informed financial decisions with the latest global economic data. Read more essential business and market news at The WAU.

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