Geopolitics Impact The Bullion Market
Gold kept its recent losses as escalating Middle East fighting stoked inflation worries. Traders fear the conflict could trigger fresh disruptions to global energy supplies. This would sustain high inflation and make central bank rate increases more likely. The metal traded close to $4,160 an ounce recently. It closed the prior trading session down 0.5 percent overall. Brent crude sat near $106 a barrel as regional tensions escalated. Washington faces growing calls to assist after Houthis struck Saudi Arabia’s main airport. Gold has shed roughly 20 percent since the US-Iran war began.
Tracking UAE Retail Prices
The conflict pushed inflation higher worldwide and prompted central banks to tighten policy. Rising borrowing costs usually weigh heavily on gold, because it pays no interest. In the UAE, prices of retail gold have cooled off slightly. 24-karat gold traded at Dh502.75 versus its opening of Dh505 the previous day. Retail 22-karat gold currently trades at Dh465.50 in the local market. 18-karat gold trades at Dh382.50 per gram for consumers. Light-weight 14-karat gold fell below the Dh300 mark, trading at Dh298.25 this Tuesday. Traders are watching Wednesday’s US inflation data for hints on future policy.
A Shifting Investment Strategy
Swaps markets put the odds of a rate hike this month at 20 percent. They also price in one further increase before the current year ends. Interestingly, short-term speculative interest in gold is currently cooling rapidly. The COMEX net long fell 8 percent to a three-month low recently. Long-horizon investors are still adding positions through ETFs steadily. Their purchases lifted total ETF holdings to the highest level in four years. Investors look beyond immediate monetary policy toward long-term fiscal debt sustainability concerns. Spot gold edged slightly higher at $4,192 during morning Dubai trading. Keep track of the global economy and your personal investments. Find vital financial news and market analysis at The WAU.
Share This Post
