Lower global bullion prices are offering slight relief to jewellery buyers and tourists in the UAE.
Dubai gold prices dropped sharply on Friday morning, mirroring a broader decline in global bullion markets as investors shifted away from safe-haven assets amid rising US bond yields, a stronger dollar, and reduced expectations of near-term US interest rate cuts.
The 24K gold rate in Dubai fell to Dh556.50 per gram from Dh563.75 on Thursday evening, marking a decline of Dh7.25 per gram overnight. Meanwhile, 22K gold prices eased to Dh515.25 from Dh522.00, offering UAE shoppers and jewellery buyers a noticeable price advantage heading into the weekend.
The sharp correction followed a 1.42 per cent decline in international gold prices to $4,610.62 per ounce, marking the fourth consecutive session of losses.
Analysts said bullion markets are facing pressure from rising oil prices, inflation concerns, and a stronger US dollar, factors that have weakened investor demand for gold.
For UAE consumers, the latest decline could encourage renewed jewellery purchases, particularly among residents preparing for weddings, summer shopping, or investment buying.
Dubai’s gold retail market typically responds quickly to global price movements, as local gold rates are closely tied to international bullion trends and currency fluctuations.
Regional prices
Across the Gulf region, gold prices in Saudi Arabia remained largely stable despite the broader global decline. The Kingdom’s 24K gold price held at SAR584 per gram, while 22K gold stayed unchanged at SAR533 per gram.
Meanwhile, India also saw lower gold prices on Friday morning. The country’s 24K gold rate fell to ₹160,090 per 10 grams from ₹162,330 a day earlier, while 22K gold declined to ₹146,750 from ₹148,800.
The decline in Indian gold prices mirrors the broader downward trend in international bullion markets, although analysts noted that retail demand in India has remained relatively resilient despite recent price volatility.
Regional trends
Globally, gold prices extended their decline as traders weighed rising inflation concerns driven by higher energy prices and monitored developments surrounding the US-China summit.
Spot gold fell 0.6 per cent to $4,619.61 an ounce in early trading, touching its lowest level since May 6. Bullion has now declined by around 2 per cent this week, while US gold futures for June delivery dropped 1.3 per cent to $4,624.
Market analysts said the stronger US dollar has emerged as a major challenge for bullion prices. The greenback has risen by more than 1 per cent this week, making gold more expensive for buyers using other currencies.
Meanwhile, higher oil prices are adding to global inflation concerns. Brent crude has climbed more than 5 per cent this week and continues to trade above $106 per barrel as the ongoing Iran conflict disrupts shipping through the Strait of Hormuz.
Rising inflation expectations have driven US Treasury yields close to one-year highs, increasing the opportunity cost of holding non-yielding assets like gold.
Analysts said markets are becoming increasingly doubtful about the likelihood of near-term US interest rate cuts after recent inflation data pointed to broader price pressures across the economy.
Geopolitical tensions also remain in sharp focus. Donald Trump said his patience with Iran was “running out” following talks with Chinese President Xi Jinping, adding further uncertainty to global financial markets.
Investment banks are also adopting a more cautious outlook on bullion. ANZ lowered its year-end gold price target by $200 to $5,600, citing persistent inflation, elevated bond yields, and continued strength in the US dollar.
Other precious metals also recorded losses on Friday. Spot silver fell 2.5 per cent to $81.41 an ounce, platinum declined 1.7 per cent to $2,020.61, while palladium eased 0.8 per cent to $1,425.50.
