Dubai 24K gold slips to Dh497.25, while international prices remain above $4,000.
Dubai: Gold prices in Dubai declined for a second consecutive day on Tuesday morning, offering jewellery buyers some relief after rates briefly moved above the Dh500 mark during the weekend.
At 9.22am, 24K gold was trading at Dh497.25 per gram, down from Dh499 on Monday. The 22K variety, which is commonly preferred for jewellery purchases, eased to Dh460.50 from Dh462.
The latest decline follows a rise that pushed Dubai gold prices to Dh503 per gram for both July 4 and July 5, the highest levels recorded so far this month. Prices began July at Dh489.75 for 24K gold and Dh453.50 for 22K gold before climbing during the first weekend and then easing over the past two trading sessions.
Buyers get some relief
The pullback offers UAE jewellery buyers a slightly more favourable entry point compared with the weekend peak, although prices remain higher than at the start of the month.
The 24K gold rate remains Dh7.50 higher than its July 1 level, while 22K gold is Dh7 above where it started the month. This means buyers are getting some relief from the recent peak, but prices have not yet returned to early July levels.
Globally, bullion prices declined for a second consecutive day after renewed attacks on shipping in the Strait of Hormuz raised concerns over energy flows through one of the world’s most important oil and natural gas transit routes.
Gold fell as much as 0.9% to around $4,125 an ounce after slipping 0.3% on Monday. Oil prices moved higher after a tanker reported being struck east of Oman, while reports indicated Iran had fired missiles at commercial vessels passing through the Strait of Hormuz.
The rise in oil prices has brought inflation concerns back into focus, increasing attention on whether the US Federal Reserve may keep monetary policy tight or consider further rate action. Higher interest rates typically put pressure on gold prices because the metal does not generate income.
Linh Tran, Market Analyst at XS.com, said gold has recovered after falling to its lowest level in nearly six months, rebounding from around $3,940 an ounce to the $4,130 range.
“At one point, buying pressure pushed prices close to the USD 4,200/oz zone before gold pulled back to its current level, suggesting that a recovery has emerged, but upside momentum is still not strong enough to confirm a clear breakout trend,” she said.
Investors are now awaiting the minutes from the US Federal Reserve’s June meeting for further clues on the direction of interest rates. Markets had previously increased expectations of a rate hike following a hawkish stance from new Fed Chair Kevin Warsh, though those expectations eased after weaker US jobs data released last week.
Tran said the interest rate outlook remains the biggest factor limiting gold’s gains, as markets have not completely ruled out a more restrictive stance from the Federal Reserve.
“In addition, although the DXY has cooled, it remains elevated around the 100.5–100.6 area, while the 10-year US Treasury yield is hovering near 4.48%,” she said. “These remain two key sources of pressure on gold, as a stronger US dollar and higher yields reduce the appeal of non-yielding assets.”
$4,000 remains a key level
Gold is still more than 20% below the level recorded immediately before the Middle East conflict, although prices have recovered after briefly falling below the psychologically important $4,000 mark and key moving averages.
Tran said the outlook is not entirely negative, as easing expectations of further rate hikes have helped prevent heavier selling, while investors continue to step in to buy during dips near the $4,000 level.
“The USD 4,000/oz zone is acting as a major balance point for the market, where pressure from the US dollar and yields is being offset by buying demand whenever prices fall significantly,” she said.
A sustained move above $4,000 could pave the way for gold to retest the $4,180–$4,200 range, with further upside potential towards $4,300 and $4,400 if momentum strengthens. However, a decisive break below the $4,000 level could trigger renewed selling pressure in the near term.
