24K gold rises to Dh487.75 per gram, but analysts warn of further downside risks as the $4,000 an ounce level comes back into focus.
Gold prices edged higher in Dubai and international markets on Wednesday morning, recovering slightly after a sharp sell-off in the previous session.
The 24K gold rate stood at Dh487.75 per gram, up from Dh485 at Tuesday’s market close.
Other categories also recorded gains, with 22K, 21K, 18K and 14K gold trading at Dh451.50, Dh433, Dh371.25 and Dh289.50 per gram, respectively.
In international markets, spot gold rose 0.9 per cent to $4,058.48 per ounce, while silver climbed more than 3 per cent to $52.83.
Gold had fallen nearly 3 per cent on Tuesday.
Dilin Wu, research strategist at Pepperstone, said the precious metal faces a more challenging outlook in the near term.
“The market has largely priced in a 25bp interest rate hike by the US Federal Reserve in December, but hotter-than-expected US inflation has brought the possibility of a 50bp move back into play. A stronger dollar and rising Treasury yields are making it harder for gold to sustain a recovery,” she added.
The key question for gold investors, Wu said, is whether further negative developments have yet to be reflected in prices.
“The tricky part is that gold could come under pressure whether risk assets rise or fall. If concerns over AI financing and profitability, or a disappointing Anthropic IPO, trigger another equity sell-off, investors may be forced to sell gold to raise cash and cover losses elsewhere. Ironically, if equities perform too well, gold could also lose some of its appeal as investors favour riskier assets,” Wu added.
A further escalation in geopolitical tensions could also weigh on the precious metal, she said. A renewed surge in oil prices could revive inflation concerns and expectations of further Federal Reserve tightening, supporting the US dollar while putting pressure on non-yielding gold.
“I’d watch $4,000 closely. A decisive break could open the door to $3,960, while gold would need to reclaim $4,100–$4,110 to rebuild bullish momentum. I’m still constructive on gold over the medium term, supported by central bank demand and persistent fiscal uncertainty. But for now, the bigger risk is that gold struggles to find a clear catalyst for a sustained recovery, even when uncertainty rises,” the Pepperstone research strategist added.
