24K gold slips to Dh487.50 in Dubai as markets await Federal Reserve move.
Dubai: Gold prices declined on Tuesday morning, offering buyers cheaper rates per gram after 24-karat gold began the week trading near the Dh500 mark.
The 24-karat gold rate stood at Dh487.50 per gram at 9:10 am, down Dh3.50 from Dh491 on Monday. The price of 22-karat gold also declined, falling Dh3.25 to Dh451.50 per gram from Dh454.75.
Tuesday’s drop brought both gold categories back to levels last seen on July 23, after several days of price gains during the final week of the month.
Gold prices retreat from July highs
Dubai gold rates have fluctuated significantly throughout July. The 24-karat gold price began the month at Dh489.75 per gram before rising to a peak of Dh503 per gram on July 4 and July 5.
Gold prices later declined to a monthly low of Dh481.50 per gram on July 16 and 17, before recovering and moving above the Dh500 mark again on July 22. The 24-karat rate reached Dh500.75 per gram that day, marking its highest level since the first week of July.
Tuesday’s price was Dh13.25 lower than the July 22 rate and Dh15.50 below the monthly peak, but it remained Dh6 higher than the lowest level recorded during the month.
The 22-karat gold rate followed a similar trend, increasing from Dh453.50 per gram on July 1 to a monthly high of Dh466 per gram on July 4 and 5. It then fell to Dh446 per gram on July 16 and 17 before recovering to Dh463.75 per gram on July 22.
Gold remains above $4,000 as investors await Fed decision
International gold prices edged lower ahead of the US Federal Reserve’s interest-rate decision on Wednesday, with bullion falling as much as 0.8% to trade near $4,040 an ounce.
“Gold has continued to consolidate within a 5% range this month as pressure on US technology stocks and rising US Treasury yields leave the metal caught between competing market forces,” said Ahmad Assiri, Research Strategist at Pepperstone.
Rising Treasury yields can weigh on gold demand because the metal does not generate interest, while a stronger US dollar can make bullion more expensive for buyers using other currencies.
Despite the recent pullback, gold has remained close to the $4,000 support level since late June, supported by investors buying during price dips. Gold-backed exchange-traded funds (ETFs) have also increased their holdings for five consecutive days, marking their longest streak of inflows since May.
“Current price movements suggest gold is establishing a stronger base above the $4,000 level, which is a positive signal considering the pressure from higher yields,” Assiri said.
Fed decision in focus
Markets are preparing for a closely watched and uncertain Federal Reserve decision, as policymakers assess weaker-than-expected US inflation figures from June alongside the recent increase in oil prices.
Interest-rate swaps suggest roughly a 40% chance of a quarter-percentage-point rate hike this week. A rate increase, or signals that borrowing costs may stay higher for longer, could push Treasury yields and the US dollar higher, potentially creating pressure on gold prices.
“Attention is now firmly on this week’s FOMC meeting, which could determine gold’s next major move,” Assiri said.
A more hawkish stance from the Federal Reserve, with policymakers placing greater focus on inflation concerns, could increase pressure on gold prices, especially if investors raise expectations for higher interest rates.
Oil prices remain a key risk factor
Developments in the Middle East continue to shape market expectations for gold, oil and inflation, following the recent pause in hostilities between the US and Iran.
US President Donald Trump said on Monday that both sides had resumed discussions aimed at ending the five-month conflict, with military strikes halted in recent days. He said there was a strong possibility of reaching an agreement but warned that fighting could restart if negotiations break down.
“Beyond monetary policy, geopolitical developments have once again become a major market driver,” Assiri said.
Oil prices remaining above $80 a barrel could complicate the inflation outlook by pushing up energy and transportation costs, even if diplomatic progress helps ease immediate concerns over further escalation.
