Gold has had a lackluster 2024 so far. Prices fell in Asian trade recently, as strong U.S. labor data prompted the market to reconsider the Federal Reserve to cut interest rates.
In the UAE, gold prices declined over AED1 per gram as markets opened the week. The slide reflected a similar drop in global rates. As a case in point, The Dubai Jewelry Group data showed the 24K of the yellow metal was trading at Dh246.5 per gram early on Monday morning. The price is down from Dh247.75 per gram when markets closed on Friday.
Gold prices under pressure
Moreover, pressure on gold prices was compounded by a positive news on the U.S. non-farm labor market, which usually gives the Fed more leeway to keep rates higher for an extended period of time.
In addition, profit-taking exacerbated the situation last month, when gold ended 2023 with over 10 percent in gains.
Read: Gold prices overcome four-day losing streak
Inflation on spotlight
Markets are now focusing on key U.S. consumer price index (CPI) for December. The data will be released this this Thursday. The index is expected to show a pick-up in inflation from the prior month.
Moreover, the Fed has warned that this inflation development along with strong labor market data are likely to keep it from cutting interest rates early. Additionally, experts say the Fed will likely cut interest rates only in May, not March as expected.
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