The 24K gold rate dropped by Dh3.75 on Friday after recording a swing of more than Dh21 throughout July.
Dubai: Gold prices in Dubai fell on Friday, ending a volatile month in which 24-karat gold rates moved within a range of more than Dh21.
The 24K gold rate fell to Dh491.75 per gram on Friday, down from Dh495.50 on Thursday, marking a decline of Dh3.75. The 22K rate also dropped by Dh3.25, falling to Dh455.50 from Dh458.75.
Friday’s decline means buyers are now paying Dh11.25 less per gram for 24K gold compared with the month’s peak of Dh503, recorded on July 4 and July 5.
Prices moved through a wide range
Dubai gold prices moved above and below the Dh490-per-gram mark several times in July, reflecting shifts in international bullion markets and movements in the US dollar.
The 24K gold rate started the month at Dh494.75 per gram on July 2 before rising above Dh500 in the first week. Prices reached a monthly high of Dh503 on July 4 and July 5, then declined to the month’s lowest level of Dh481.50 on July 16 and July 17.
Rates recovered to Dh500.75 on July 22 before easing again, falling to Dh485 on July 28 and ending the month at Dh491.75 per gram.
The 22K gold rate followed a similar trend, reaching a monthly high of Dh466 per gram on July 4 and July 5 before declining to Dh446 in the middle of the month.
Prices later recovered to Dh463.75 on July 22 before easing again to close July at Dh455.50 per gram.
Gold heads for monthly gain
International gold prices were on track for their first monthly increase since February, supported by the US Federal Reserve’s decision this week to keep interest rates unchanged amid inflation concerns linked to the Iran war.
Bullion traded near $4,080 an ounce and was heading towards a July gain of nearly 2%, despite falling as much as 0.8% on Friday.
The US dollar strengthened against the yen after recovering from an overnight decline that followed what appeared to be intervention by Japan in currency markets.
The dollar index fell 0.9% on Thursday, making gold priced in the currency more affordable for many international buyers, before recovering by as much as 0.3% on Friday.
Interest rates remain in focus
Gold has declined more than 20% since the US-Iran war began over five months ago, as rising energy costs have added to inflation concerns and strengthened expectations that interest rates may stay elevated.
Higher interest rates typically weigh on gold prices because the metal does not generate interest income. However, buying during price dips has helped support bullion above the $4,000-an-ounce level in recent weeks.
Traders are now looking for further indications of the Federal Reserve’s next policy move after policymakers voted 9-3 to keep interest rates unchanged.
“If inflation continues to remain elevated through the forecast period, interest rates could well be part of the solution, but I wouldn’t say they are the only factor,” Federal Reserve Chairman Kevin Warsh said.
The Jackson Hole Economic Policy Symposium in late August is expected to be the next major event for gold markets, with the Federal Reserve chair traditionally using the gathering to signal the central bank’s policy outlook.
Regional tensions remain a factor
The US and Iran exchanged strikes again this week, with Washington targeting dozens of locations in Iran on Wednesday following attacks on American military bases across the region.
Saudi Arabia has also explored the creation of a multinational alliance to help protect shipping routes in and around the Red Sea, keeping geopolitical risks and their potential impact on energy markets in focus.
