Gold prices extend August rally as Dubai 24K hits Dh541.
Dubai: Gold prices climbed again on Thursday morning, with 24K reaching Dh541 per gram and 22K hitting Dh501, taking local rates to their highest levels since early June.
The latest rise extends a strong August rally in Dubai’s gold market. 24K gold climbed from Dh492.25 per gram on August 4 to above Dh500 just two days later, before reaching Dh533.25 on August 12. After briefly easing to Dh523.50, the rate resumed its climb, reaching Dh540.75 on Wednesday and Dh541 on Thursday morning.
The 22K rate has followed a similar trajectory, rising from Dh455.75 per gram on August 4 to Dh501 on Thursday. The latest levels put both purities close to their highest prices since early June.
The 22K rate has followed a similar trajectory, rising from Dh455.75 per gram on August 4 to Dh501 on Thursday, an increase of Dh45.25, or nearly 10 per cent, in just over two weeks.
Global gold holds above $4,500
The rise in Dubai gold prices comes as international bullion remains above $4,500 an ounce, following a rally of more than 3% in a single session. Gold climbed to around $4,520, its highest level since early June, during Asian trading before retreating as the US dollar strengthened.
Rania Gule, Senior Market Analyst at XS.com – MENA, said the pullback does not necessarily signal the end of the broader uptrend, describing it as profit-taking after the sharp rally.
The gold market is being pulled in opposite directions by expectations for US interest rates and movements in Treasury yields. Minutes from the Federal Open Market Committee’s July meeting showed continued concerns about inflation, with several policymakers indicating that another rate increase could be warranted if price pressures fail to ease sufficiently.
The Fed maintained its policy rate at 3.50% to 3.75%, although three officials favoured a 25-basis-point increase.
Higher rate expectations can strengthen the US dollar and make non-yielding gold less attractive. However, falling Treasury yields have continued to support bullion, helped by the US Treasury’s decision to expand its long-term debt buyback operations.
“I do not believe the hawkish Fed minutes alone are enough to reverse the precious metal’s broader uptrend.”
Rania Gule, Senior Market Analyst at XS.com
$4,500 becomes key level
Gold’s ability to hold above $4,500 an ounce is now a key focus for investors following its latest rally. Gule said a sustained close above the level would be more significant than a brief intraday move above it, while a retreat below $4,500 could trigger further profit-taking.
She expects gold to maintain its positive momentum in the near term as long as it remains above the $4,500 area, although volatility is likely to remain elevated.
“In the short term, I believe gold has a good chance of maintaining its positive momentum as long as it remains above the $4,500 area,” Gule said.
Geopolitical tensions are also supporting the outlook, particularly the US-Iran confrontation and the risk of disruption to regional energy flows. Such developments could strengthen demand for gold as a safe-haven asset, while higher oil prices could add to inflation pressures and influence the Federal Reserve’s interest-rate decisions.
US data could drive next move
Investors are now turning their attention to key US economic indicators, including initial jobless claims and the Philadelphia Fed Manufacturing Index. Forecasts put initial jobless claims at 210,000, compared with 209,000 previously, while the Philadelphia Fed index is expected to ease to 24.1 from 41.4.
Gule said weaker-than-expected employment data could reduce expectations for further rate increases, potentially supporting gold. Conversely, particularly strong figures could strengthen the US dollar and put pressure on bullion prices.
“My base-case scenario is for elevated volatility with an upward bias, provided gold remains above the $4,500 level,” she said.
