24K gold declined to Dh485.25, losing Dh15.50 since Wednesday’s move past the Dh500 mark.
Dubai: Jewellery buyers found some price relief on Friday afternoon as Dubai gold prices eased after 24K gold’s brief move above Dh500 earlier this week.
The price of 24-karat gold stood at Dh485.25 per gram at noon, down Dh2.25 from Dh487.50 on Thursday and Dh15.50 below Wednesday’s Dh500.75 level. Meanwhile, 22-karat gold fell to Dh449.25 per gram from Dh451.50 a day earlier, leaving the popular jewellery category Dh14.50 below Wednesday’s Dh463.75.
Gold retreats from July highs
Friday’s price puts 24-karat gold Dh17.75 below its July peak of Dh503 per gram, which was recorded on July 4 and July 5, marking a sharp pullback from the month’s highest level.
The month began with 24-karat gold at Dh489.75 per gram, before prices surged above the Dh500 mark during the first week of July. The metal later slipped to a monthly low of Dh481.50 on July 16 and 17, before rebounding to Dh500.75 on July 22. However, the rally proved short-lived, with prices retreating over the following two trading sessions.
22-karat gold mirrored the same trend, climbing to a monthly high of Dh466 per gram in early July before falling to Dh446 in the middle of the month. At Dh449.25 per gram on Friday, the popular jewellery category remains Dh3.25 above its monthly low, while offering buyers a more affordable entry point than earlier this week.
Global gold extends decline
Gold prices also weakened in international markets, dropping as much as 0.7% to around $4,020 an ounce after tumbling 2% in the previous session.
The decline came as renewed tensions in the Middle East pushed Brent crude above $100 a barrel for the first time since May, fuelling concerns that rising energy costs could reignite inflationary pressures.
Meanwhile, two-year US Treasury yields rose for a sixth straight session on Thursday, signalling growing market expectations that the US Federal Reserve may adopt a tighter monetary policy stance.
Rate hike expectations weigh on gold
Higher interest rates typically reduce the appeal of gold, as the precious metal does not generate interest income.
Swap markets currently assign a 34% probability to the US Federal Reserve raising interest rates at its policy meeting next week. Traders have already priced in at least one rate hike in September, with the possibility of another increase before the end of the year.
Adding to market uncertainty, the US has announced tariffs ranging from 10% to 12.5% on imports from most major trading partners, citing concerns over alleged forced labour in supply chains.
Gold has traded close to the $4,000-an-ounce level since late June, with many traders viewing it as a key support zone despite recent volatility.
Even after its latest decline, the precious metal remains around 25% below its record high of nearly $5,600 an ounce, reached before the US and Israel launched strikes on Iran in late February.
