Gold rates stabilized after recent fluctuations, with buyers closely monitoring signals from the US Federal Reserve.
Dubai: Gold prices in Dubai edged higher on Wednesday morning, yet stayed below the key Dh600 level that continues to influence local buying activity. At 9:50 am, 24K gold was trading at Dh594.50 per gram, up from Dh590.75 on Tuesday, while 22K rose to Dh550.50 from Dh547.
The modest gains follow several weeks of volatile price swings, which have made shoppers cautious and prompted jewellers to focus on short-term trends rather than long-term forecasts.
Dh600 remains a key psychological barrier
Recent movements highlight Dh600 as a strong resistance level in February. Prices briefly surpassed it on multiple occasions—reaching Dh610.50 on February 9 and again on February 11—before retreating below the threshold.
Mid-month trading continued to reflect volatility, with 24K gold hitting Dh607.50 on February 14 and 15, then dipping to Dh596.75 on February 12 and Dh602 on February 16. These movements indicate the market is now in a consolidation phase following the earlier surge.
The broader trend shows a sharp rally at the end of January, when 24K gold peaked at Dh639.25 on January 28 and 22K at Dh591.75. Prices then corrected sharply, falling to Dh564.25 for 24K and Dh522.50 for 22K by February 2, before gradually recovering.
Global bullion trends continue to steer local pricing, with international gold climbing back above $4,900 an ounce on Wednesday. This rebound came after a brief two-day dip, prompted by a stronger dollar, as buyers re-entered the market.
Bullion gained as much as 0.9% in thin trading, with many Asian markets closed for the Lunar New Year. The metal had fallen over 3% in earlier sessions amid a stronger US dollar.
A strong rally in late January had driven gold to a record above $5,595 an ounce, but heavy speculative buying sparked a sharp correction, briefly pulling prices near $4,400. Since then, trading has remained volatile, with gold recouping nearly half of those losses.
Attention now turns to US interest rate signals, which are expected to guide gold’s next major move. Lower borrowing costs usually support non-yielding assets like gold.
Federal Reserve Governor Michael Barr indicated that rates should stay steady “for some time,” until inflation shows clear signs of moving toward the central bank’s 2% target. Meanwhile, Chicago Fed President Austan Goolsbee noted the possibility of additional rate cuts later this year if inflation continues to ease.
Analysts say these policy cues, combined with geopolitical tensions and ongoing investor demand, are likely to keep gold prices volatile in the near term while sustaining an overall upward trend.
