Gold prices took a hit on Tuesday as U.S. Federal Reserve Chairman Jerome Powell acknowledged that a quick undoing of Fed rate tightening is far from over.

Spot gold was down 0.34 per cent at $1,733.9 per ounce by 9.20 am UAE time. In the UAE, gold prices plunged more than two-and-a-half dirhams per gram at the opening of the markets on Tuesday.

The Dubai Gold and Jewellery Group data showed 24K trading at Dh210.25 per gram on Tuesday morning as against Dh213.0 at the close of the markets on Monday. At the same time, 22K fell below Dh200 per gram again to trade at Dh197.5 on Tuesday. Among the other variants of the precious metals, 21K and 18K were trading at Dh188.5 and Dh161.5 per gram, respectively.

Edward Moya, a senior market analyst at Oanda, said non-interest-bearing gold got crushed early as more global central bank rate hikes are getting priced in.

“If the dollar does not rally here, that could provide some relief for gold.

Suppose equities remain in risk aversion mode as the speculative money that bought risky assets this month grows nervous that economic growth is about to collapse. In that case, gold might be able to stabilize here. Gold was vulnerable to a plunge towards $1,700 but it is starting to show some resilience,” he said.