Dubai 18K gold price stands at Dh398.25 per gram on Tuesday morning.
If you are planning to buy gold in the UAE, prices have eased slightly from recent highs. Over the past 30 days, gold prices have declined by 6.30 per cent. On Tuesday morning, 18-karat gold was trading below the Dh400-per-gram mark at Dh398.25.
In the UAE, 24-karat gold was trading slightly lower at Dh523.25 per gram, compared with the previous night’s close of Dh523.75. Meanwhile, 22-karat gold also recorded a decline of 25 fils. In international markets, bullion was trading at around $4,340 an ounce, reversing course after posting its biggest one-day decline in a week the previous day.
Gold prices have been moving in tandem with oil prices, with the recent decline in crude prices helping ease inflationary concerns. Lower inflation expectations can support gold by increasing the scope for lower interest rates, which typically makes the non-yielding asset more attractive.
Oil prices, however, held steady on Tuesday after falling more than 9 per cent over the previous four sessions. Concerns over potential disruptions to Middle East exports have eased, while renewed diplomatic efforts are underway to end the US-Iran conflict.
Are gold investors buying the dip?
Commenting on the recent decoupling in gold prices, Ole Hansen, Head of Commodity Strategy at Saxo Bank, said demand for gold-backed ETFs was also showing signs of divergence.
“Real yields are rising, with the 10-year tenor reaching its highest level in 20 years amid sticky inflation and a renewed surge in long-end government bond yields. Yet instead of triggering another wave of ETF liquidation, investor demand for gold is showing resilience. This time, therefore, it is not just the gold price that has decoupled from real yields – ETF holdings are showing signs of doing so as well.”
Sustained optimism over gold’s long-term prospects has also encouraged some investors to buy during recent price dips. Gold-backed exchange-traded funds have recorded roughly 50 tonnes of inflows so far this month, marking a third consecutive month of gains.
