Oil near $100, higher yields weigh on gold momentum globally.
Dubai: Gold prices in Dubai moved slightly lower on Friday morning, extending a period of volatile trading that has shaped the precious metals market over the past two weeks.
Retail rates in the local market mirrored the softer trend. At around 10:30 a.m., the price of 24-karat gold was Dh615 per gram, down from Dh617.50 on Thursday, while 22-karat gold slipped to Dh569.50 from Dh571.75 a day earlier.
Local prices have seen sharp fluctuations over the past two weeks as global bullion markets respond to geopolitical tensions, volatile energy markets, and changing expectations for interest rates.
Gold prices in Dubai have experienced significant fluctuations since the beginning of the month, mirroring the volatility in global markets.
Gold rates rose in early March, with 24-karat gold surpassing Dh640 per gram and 22-karat gold nearing Dh594. However, the rally was short-lived, giving way to a series of pullbacks. Prices fell to roughly Dh614–Dh620 during the first half of the month before declining further in the most recent session.
In the UAE, retail demand typically follows global bullion trends, so sharp movements in international markets are quickly reflected in the prices at Dubai’s gold souks and malls.
Global Market Pressure
International bullion markets have experienced significant fluctuations this week. Although gold climbed on Friday, it was still set for a second consecutive weekly decline following a two-day drop earlier in the week.
Spot gold traded above $5,100 an ounce, recouping some of its earlier losses, while oil hovered near $100 a barrel amid sharp swings in energy markets.
The momentum of the gold rally has eased since tensions between the US, Israel, and Iran escalated nearly two weeks ago. Disruptions to shipping through the Strait of Hormuz have caused one of the largest shocks to global oil markets in recent years.
Rising crude prices have intensified inflation concerns and lowered expectations for near-term interest rate cuts by central banks.
Interest Rate Outlook
Higher yields have also dampened sentiment for precious metals. US Treasury yields rose to their highest levels since August, driven by stronger economic data and diminishing hopes of immediate monetary easing.
Traders now assign almost no likelihood of a rate cut at the upcoming Federal Reserve meeting, with only about a 70% chance of one later this year.
Higher borrowing costs typically make gold less attractive, as the metal does not yield interest.
Volatility in other markets has also influenced bullion trading, with some investors selling gold to cover losses or margin calls in other parts of their portfolios amid recent financial turbulence.
Despite the recent pullback, gold remains well above its levels at the start of the year, rising roughly 18% since January and largely staying above the $5,000-an-ounce mark.
