Gold prices down in market opening

24K variant was priced slightly lower at AED246 per gram
Gold prices down in market opening
Many believe that gold prices will not breach the $2045 level

In early morning trade to open the week in the UAE, gold prices fell by AED1 per gram. The 24k variant of the yellow metal traded at AED246 per gram, compared to its close of AED247 last week. The data was published by the Dubai Jewelry Group.

Meanwhile, early Asian trade show gold prices holding steady. The positive US jobs report dashed hoped for a March rate cut, with Federal Reserve chairman Jerome Powell saying the first interest rate cut is likely to happen in May.

Last week, the U.S. Nonfarm Payrolls (NFP) report came with better than expected results, surging to 353,000 in January from 333,000 in December (revised up from 216,000). Meanwhile, The Unemployment Rate was unchanged at 3.7 percent.

Read: Gold prices recover from dip as Powell counters rate cut expectations

As a result, the dollar attracted some buyers following the job reports. Traders reduced their bets on an interest rate cut in May, and the probability of a March rate cut has dropped to 19 percent, compared to 38 percent just a day ago, according to the CME FedWatch tool. It’s worth noting that the higher-for-longer rate narrative reduces gold’s appeal since it provides no yield.

With that said, the downside of the gold price might be limited amid the ongoing geopolitical tensions in the Middle East. At press time, the gold price is trading at $2,038, gaining 0.12% on the day.

Gold prices outlook

Analysts are keeping a close watch on the status of tensions in the Middle East and its impact on gold, as events of this nature usually play some influence, along with U.S. monetary policy.

But many believe that gold prices will not breach the $2045 level. They could go to as low as $2016 before going back up again.

In addition, market players will keep an eye on the Chinese Caixin Services PMI and U.S. ISM Services PMI data today. These events could give a clear direction to the gold price.

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