Gold prices eased on Tuesday, influenced by a slightly firmer dollar and growing optimism regarding a potential ceasefire between Russia and Ukraine, which dampened investor demand for safe-haven assets.
In Dubai, gold price has seen a decline, with 24-carat gold decreasing by AED2.75 to AED387.75, while 22-carat gold fell by AED2.25 to AED359.25. Additionally, 21-carat gold experienced a drop of AED2.25, bringing its price to AED344.50, and 18K decreased by AED1.75 to AED295.25.
Spot gold was down 0.4 percent at $3,215.31 an ounce, as of 02:10 GMT. It is currently trading above $3,212. U.S. gold futures slipped 0.5 percent to $3,218.40 (currently trading above $3,215). The dollar slightly recovered after hitting a more than one-week low in the previous session, making gold priced in dollars less appealing to holders of other currencies.
“We are seeing the knee-jerk response to the U.S. credit downgrade wear off and there’s some hope of a truce between Ukraine and Russia,” reported Reuters, citing Capital.com’s financial market analyst Kyle Rodda. U.S. President Donald Trump spoke with President Vladimir Putin on Monday, stating that Russia and Ukraine will immediately commence negotiations toward a ceasefire.
“We are seeing buyers emerge on dips below $3,200. However, I think we are due a bigger pullback, especially if there’s further easing in geopolitical risks and we see upward pressure on yields building from U.S. fiscal policy,” Rodda added.
Read more: Dubai gold price today rises as soft dollar, tariff threats boost safe-haven demand
Fed’s cautious stance
Gold, regarded as a safe asset amid geopolitical and economic uncertainties, has reached multiple record highs this year and is up about 23 percent so far this year. U.S. Federal Reserve officials on Monday approached cautiously the implications of the latest downgrade of the U.S. government’s credit rating and the unsettled market conditions as they continued to navigate a very uncertain economic environment.
Moody’s cut the United States’ rating to “Aa1” from “Aaa” on Friday, citing rising debt and interest rates “that are significantly higher than similarly rated sovereigns.” Several Fed officials are scheduled to speak later in the day, potentially providing further insights into the economy and the central bank’s policy direction.
Markets are now pricing in at least 53 basis points of rate cuts this year, with the first reduction expected to begin in October. Spot silver fell 0.3 percent to $32.25 an ounce, platinum rose 0.3 percent to $1,000.71, and palladium lost 0.1 percent to $973.74.
