24K gold climbed to Dh532 per gram, up from Dh522 at the beginning of September.
Dubai: Gold prices in the UAE rose again on Thursday morning, continuing their strong start to September and increasing costs for residents looking to buy jewellery or invest in the metal.
Gold climbs back above $4,400
The rise in UAE retail prices coincides with a rebound in global gold markets after the metal dropped to around $4,285 an ounce.
According to Linh Tran, Market Analyst at XS.com, gold’s recovery above $4,400 represents a gain of more than $115 per ounce, or nearly 2.7%, from its recent low.
The recovery comes after gold pulled back from its late-August peak of nearly $4,700. Comments by Federal Reserve Chair Kevin Warsh at Jackson Hole prompted markets to anticipate higher US interest rates, driving Treasury yields and the dollar higher and weighing on gold.
Market conditions have since become more favourable. The 10-year US Treasury yield eased to around 4.78% after approaching 5%, while the dollar index slipped towards the 99.1–99.2 range.
Tran attributed much of gold’s rebound to the shift in bond yields, noting that pressure eased as yields and the dollar stopped climbing. The price decline also encouraged some buyers to return.
Softer US jobs figures offer support
Weaker US private-sector employment figures added support for gold, although the immediate price response remained modest.
ADP figures showed that US private employers added 38,000 jobs in August, falling short of the expected 48,000. Manufacturing employment declined by 17,000, while professional and business services lost 16,000 positions.
Investors are now looking to the official nonfarm payroll report for a clearer picture of the US labour market.
New York Fed President John Williams said economic signals were not yet clear enough to determine whether further monetary tightening was necessary, making September’s policy decision dependent on upcoming data.
Interest-rate uncertainty remains a key concern, with markets assigning roughly a 62% chance to another 25-basis-point Fed rate hike in September. Annual headline and core PCE inflation stood at 3.7% and 3.3%, respectively, both above the central bank’s 2% target.
Middle East tensions create mixed pressures on gold
Geopolitical uncertainty continues to shape gold prices, with regional tensions exerting opposing pressures.
The US-Iran conflict may boost demand for gold as a safe-haven asset. However, any resulting rise in oil prices could fuel inflation expectations and keep US interest rates higher for longer.
Tran attributed the recent rebound to buying at lower prices, declining bond yields, a modestly weaker dollar and investors seeking protection against geopolitical uncertainty.
Gold’s near-term direction will largely hinge on upcoming US jobs and inflation data, alongside guidance from the Federal Reserve.
Tran said falling Treasury yields and a softer dollar were supporting gold, but more evidence was needed to confirm easing inflation and continued weakness in the US labour market.
Longer-term demand holds firm
Central-bank purchases and investor demand continue to support gold beyond its recent price fluctuations.
Central banks bought a net 289 tonnes in the second quarter, while global gold exchange-traded funds drew $3 billion in July, ending two consecutive months of outflows.
Tran maintained a cautiously positive medium-term outlook, citing central-bank demand, investment inflows and concerns about US public debt as key sources of support.
Gold’s recovery from lows of around $4,283–$4,285 has relieved some recent selling pressure, while its climb above $4,400 has strengthened its short-term position.
However, Tran cautioned that the rebound did not yet establish a sustained upward trend. US employment figures, inflation data and interest-rate expectations are likely to remain major price drivers.
