Gold prices inched higher in the UAE at the opening of the markets on Tuesday morning.

The Dubai Jewellery Group data showed 24K trading at Dh261.5 per gram on Tuesday morning as compared to last night’s close of Dh261.25 per gram. Among the other variants of the yellow metal, 22K opened at Dh242.25, 21K at Dh234.5 and 18K at Dh201.0 per gram.

Globally, spot gold was trading at $2,158.29 per ounce at 9.40am UAE time.

Bas Kooijman, CEO and asset manager of DHF Capital, said the precious metal prices stabilised to a certain extent after sliding last week from their peak as they reacted to last week’s economic data, as stronger-than-expected inflation supported the US dollar and Treasury yields.

“The data weighed on expectations for earlier interest rate cuts by the Fed. Traders could remain cautious as they await the Fed’s interest rate decision due this week, with market consensus projecting rates to remain unchanged at 5.5 per cent. A less hawkish stance from the Fed could lead to a weaker dollar, lower yields and potentially bolster gold prices, providing underlying support for the metal,” he said.

At the same time, gold may find continued support in Chinese demand which could help extend its rally. Chinese gold ETFs saw inflows for the third consecutive month in February, adding RMB778 million ($109 million) and reaching a record-high total AUM of RMB31 billion ($4.3 billion), he said

Moreover, the People’s Bank of China reported another 12-tonne gold purchase in February, extending its buying streak to 16 months and bringing the total reserves to 2,257 tonnes.

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