CBUAE’s gold reserves surpass Dhs23 billion

The gold reserves of the Central Bank of the United Arab Emirates (CBUAE) exceeded Dhs23 billion by the end of Q3/24. This represents a month-on-month increase of 5.3 per cent, or Dhs1.164 billion, bringing the total gold reserves to Dhs23.185 billion compared to Dhs22.021 billion at the end of August.

Since the beginning of the year, the gold reserves have grown by more than 27.76 per cent, or over Dhs5 billion, from Dhs18.147 billion at the end of last year, According to the CBUAE’s Monthly Statistical Bulletin for September released.

In the meantime, the bulletin indicated that the value of demand deposits grew by more than 3 per cent to exceed Dhs1.083 trillion at the end of September, of which Dhs781.528 billion were in the local currency.

It added that the banking sector has witnessed a significant surge in deposits, with savings deposits reaching Dhs304.534 billion, of which approximately Dhs256.6 billion is denominated in the local currency. Furthermore, time deposits have reached Dhs888.473 billion, with around Dhs542.6 billion in local currency.

The statistical bulletin revealed a monthly increase in the net international reserves of the UAE banking sector, reaching Dhs1.317 trillion at the end of September, compared to Dhs1.305 trillion at the end of August. This represents a year-to-date increase of approximately 15% from Dhs1.145 trillion at the end of December of the previous year.

The bulletin also revealed a significant increase in the value of transactions processed within the country’s banking sector via the UAE Fund Transfer System (UAEFTS), exceeding Dhs14.338 trillion in the first nine months of this year.

The statistics also indicated that the value of circulated checks, based on their e-images, exceeded Dhs979.77 billion.

Furthermore, the value of cash withdrawals from the CBUAE from the beginning of the year until the end of September reached approximately Dhs151.97 billion, while cash deposits with the central bank amounted to around Dhs140.83 billion.

CBUAE LOWERS RATES: The Central Bank of the UAE (CBUAE) has decided to cut the Base Rate applicable to the Overnight Deposit Facility (ODF) by 25 basis points, from 4.65 per cent to 4.40 per cent, effective from Thursday,  December 19. This decision was taken following the US Federal Reserve’s announcement today to reduce the Interest Rate on Reserve Balances (IORB) by 25 basis points.

The CBUAE has also decided to maintain the interest rate applicable to borrowing short-term liquidity from the CBUAE at 50 basis points above the Base Rate for all standing credit facilities.

The Base Rate, which is anchored to the US Federal Reserve’s IORB, signals the general stance of monetary policy and provides an effective floor for overnight money market interest rates in the UAE.

It might be time for shoppers in the UAE to take a closer look at gold or jewellery after the price of gold drop by over $100 per ounce since December 11. And just in the last few hours, gold has been down by $35 to $2,610 an ounce.

For some time, gold prices had even dropped below $2,600 in the last few hours. But the current $2,610 represents the lowest since mid-November.

The UAE gold rate for today has been set at Dhs292.5, lower by Dhs1. This is the lowest rate in the last 10 days. The UAE gold rate for today has been set at Dhs292.5.

Shoppers and retailers are hoping this week’s softening will continue, thus setting off a ‘mini gold rush’ in the final days of 2024. “The Dhs290 a gram levels will prompt heavier spending on gold by tourists, but as far as resident shoppers are concerned, they might want to see gold down by some more,” said a jewellery retailer.

Gold prices gained on Thursday, rebounding from a one-month low, as the market digested the US Federal Reserve’s hint of a gradual policy easing next year, with investors awaiting more data to gauge the economy’s health. Spot gold gained 0.7 per cent to $2,605.20 per ounce as of 1301 GMT, having hit its lowest since Nov. 18 earlier in the session. US gold futures fell 1.3 per cent to $2,619.50.

Markets initially dropped after Fed Chair Jerome Powell hinted at fewer rate cuts next year, but quickly recovered as investors recognized this aligned with recent expectations, said StoneX analyst Rhona O’Connell.

The Fed’s “dot plot” released on Wednesday forecast two quarter-point rate cuts next year, aligning with recent futures market trends.

Powell said an interest rate hike does not appear to be a likely outcome as the Fed works to bring inflation down to its 2 per cent target.

The focus now will be on key US GDP and initial jobless claims data later in the day, besides core PCE data — the Fed’s preferred inflation measure — on Friday.