China central bank purchases and Middle East tensions keep Gold prices in focus.
Dubai: Gold prices in Dubai moved higher on Friday morning, putting jewellery buyers and investors on alert after a volatile start to May that has already seen sharp day-to-day fluctuations in local rates.
At 8.37am on Friday, 24-karat Gold was priced at Dh568.50 per gram, up from Dh565 on Thursday, while 22-karat gold rose to Dh526.50 from Dh523.
The latest increase brings 24-karat gold close to the month’s opening level of Dh557.50 recorded on May 1, after prices fell to Dh546 on May 4 before rebounding steadily during the week.
The rebound has been particularly noticeable for consumers tracking daily jewellery rates, with 24-karat Gold gaining Dh22.50 per gram from its May 4 level, while 22-karat gold has risen Dh21 over the same period. For UAE residents planning purchases, even small per-gram increases can significantly affect the final cost of heavier jewellery pieces, coins, or investment bars.
Buyers face another volatile weekend
The latest rise in Dubai rates followed a recovery in global bullion markets, with spot gold trading near $4,720 an ounce after renewed buying interest emerged following fresh central bank demand from China.
Gold ended the previous session slightly lower, but the market regained support after data showed the People’s Bank of China purchased 8 tonnes of gold in April.
The purchase marked the bank’s largest monthly addition since 2024 and extended a buying streak that traders are monitoring closely, as central bank demand has remained one of the key drivers behind gold’s multi-year rally.
Middle East tensions keep gold in focus
Fresh clashes in the Middle East have kept Gold on investors’ radar, even as the metal has faced pressure since the conflict began. The United States struck military targets in Iran after Iran reportedly fired on three navy destroyers sailing through the Strait of Hormuz, heightening risks around one of the world’s most critical energy corridors.
The escalation has further complicated efforts to reopen the Strait of Hormuz, a key route for global energy supplies, at a time when markets are already highly sensitive to disruptions in oil and gas shipments. Gold typically benefits during periods of geopolitical uncertainty, but the current conflict has created a more complex environment as rising energy prices could fuel inflation and reduce expectations for near-term interest rate cuts.
Gold has fallen around 11% since the conflict erupted, as traders worry that any energy shock linked to the Strait of Hormuz could keep inflation elevated and interest rates higher for longer. Higher rates typically weigh on gold because the metal does not generate interest income, while a stronger US dollar makes bullion more expensive for buyers using other currencies.
US jobs data may determine gold’s next move
The next major signal for gold buyers is expected to come from US non-farm payrolls data due later on Friday, which could shape expectations for the Federal Reserve and its interest rate path.
Some Fed officials have downplayed the likelihood of a near-term return to monetary easing, with the conflict adding uncertainty to the economic outlook and inflation forecasts. This has left gold caught between two opposing forces — geopolitical tensions supporting prices, while expectations of prolonged higher interest rates continue to limit gains.
Dubai buyers may therefore continue to see volatility in local gold rates in the coming sessions. So far this month, 24-karat gold has moved from Dh557.50 on May 1 to Dh546 on May 4, before climbing back to Dh568.50 by Friday morning.
