Gold remains above late-June levels despite opening lower on Monday.
Dubai: Gold prices in Dubai edged lower on Monday after remaining steady over the weekend, with 24-karat gold priced at Dh501 per gram at 9:35 am, down from Dh503 on Sunday.
The 22-karat gold price also slipped to Dh464 per gram from Dh466 on Sunday, as global gold prices gave back some of last week’s gains in early Monday trading.
Despite the latest dip, Dubai gold prices remain well above late-June levels, when 24-karat gold was Dh485.25 per gram on June 30 and Dh485.75 on June 29. Prices rose steadily in early July, climbing from Dh489.75 on July 1 to Dh494.75 on July 2, before crossing Dh501 on July 3 and holding at Dh503 over the weekend.
Global gold holds weekly gain
Gold prices steadied near $4,160 an ounce after recording their first weekly gain since May, supported by easing expectations of further US Federal Reserve interest rate hikes.
Ahmad Assiri, Research Strategist at Pepperstone, said gold rallied last week after markets interpreted comments from Fed Chair Warsh as less hawkish than previously expected. This led to lower US Treasury yields, a slightly weaker US dollar, and pushed gold closer to $4,200 as investors scaled back expectations for further monetary tightening.
Gold typically benefits when rate-hike expectations ease, as lower yields reduce the opportunity cost of holding the metal.
Yields remain key driver
Assiri added that gold gave back part of its gains in early Monday trading, though overall sentiment remained mildly positive after several weeks of selling pressure.
“In my view, gold is likely to remain under pressure, with elevated yields continuing to cap demand. That said, the outlook is notably brighter than in recent weeks, when the market was targeting a move towards the $3,900 range,” he said.
“At the core of this, markets are still unable to clearly interpret Warsh’s policy outlook, as he continues to avoid providing forward guidance, thereby introducing higher volatility into the yield curve and, in turn, the metal.”
July prices remain above June lows
Dubai gold prices experienced volatility in June, with 24-karat gold peaking at Dh522.25 on June 16 before declining to Dh486 on June 25 and Dh485.25 by June 30.
The start of July has been stronger, with 24-karat gold rising back above Dh500 by July 3. The 22-karat rate followed a similar trend, climbing from Dh453.50 on July 1 to Dh466 over the weekend before easing to Dh464 on Monday.
Weaker US jobs data and lower energy prices also contributed to traders scaling back expectations of further monetary tightening. Oil prices fell on Monday as increased tanker traffic through the Strait of Hormuz and signals from OPEC+ of higher supply helped ease concerns about inflationary pressures that had previously supported higher borrowing cost expectations.
