Gold prices in the UAE dropped on Tuesday. The price per gram fell to AED 400.24, down from AED 401.15 the day before. The price per tola also decreased to AED 4,668.28, down from AED 4,678.92. The US Dollar Index is stable at about 97.90 after a recent decline of over 0.50%. A stronger dollar makes gold pricier for buyers using other currencies, which impacts its price.

Trump Powell Allegations

US President Donald Trump has denied plans to fire Fed Chairman Jerome Powell, despite reports suggesting otherwise. Meanwhile, Congresswoman Anna Paulina Luna accused Powell of lying about the Federal Reserve’s headquarters renovations. Views on interest rate cuts differ among US central bank officials. Some worry that delaying cuts may lead to aggressive actions later. Fed Governor Christopher Waller indicated a possible rate cut in July due to economic risks. Gold prices in the UAE reflect international rates and are updated daily based on market changes. Local prices may vary slightly from these benchmarks. Gold is considered a safe haven asset, and central banks hold it as a reserve. Its price is influenced by geopolitical factors, interest rates, and the US Dollar’s performance.

Gold Price Trends

Recently, the decline in gold prices is linked to the stronger US dollar, which reached a multi-week high above 105 on the index. This strength makes gold more expensive for buyers outside the US, putting pressure on its price. Traders should pay close attention to this. The differing opinions among US central bank officials create uncertainty, but market data offers clarity. The CME FedWatch Tool indicates that traders see over a 60% chance of a rate cut by September, even as annual consumer prices rose by 3.3%. Waller’s comments about a potential rate cut align with this perspective, pointing to a dovish outlook. Political issues, like Luna’s accusations against Powell, may cause short-term volatility but are unlikely to set long-term trends. Traders should focus on economic data that affects central bank policies, rather than political news. Historically, gold prices are more influenced by interest rates and currency changes than internal political matters. Historically, during easing cycles, including in 2019, gold often rises in the months before the first interest rate cut as markets anticipate the change. The current situation offers traders a chance to prepare for potential policy shifts. Anticipation can be more profitable than the actual event. With uncertainty but a probable trend towards easing, derivative traders should explore strategies to benefit from price movements. Buying call options can be an easy way to tap into a possible price rally from future rate cuts. Increased volatility also raises option premiums, so selling put options might be a good strategy for those who believe prices will hold steady. Create your live VT Markets account and start trading now.

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