Dubai gold climbs while India prices fall as markets await Warsh’s Fed signals.
Dubai: Gold prices in Dubai edged higher on Thursday, giving shoppers a slightly more expensive start to the day as the precious metal held above $4,600 an ounce and investors assessed the outlook for US interest rates.
The rise comes after gold declined sharply in the previous session following US inflation data, with markets now turning their attention to Federal Reserve Chairman Kevin Warsh’s speech at the Jackson Hole symposium on Friday.
The UAE’s 24K gold price rose to Dh556.50 per gram, up from Dh554.25 at the previous close. The 22K rate increased to Dh515.25, compared with Dh513.25 previously.
Internationally, gold was quoted at around $4,607 an ounce, reflecting a modest gain as investors weighed the outlook for US monetary policy.
For UAE consumers, the modest daily increase highlights how quickly gold prices can fluctuate, even as the precious metal continues to maintain a strong longer-term trend.
Fed in focus
The latest US inflation data has put Federal Reserve policy firmly in focus. The Personal Consumption Expenditures (PCE) price index, the Fed’s preferred inflation gauge, rose 3.7% year on year in July, slightly above economists’ 3.6% forecast. Core PCE inflation remained at 3.3%.
The stronger-than-expected reading has increased market expectations of a possible September rate hike. Fed funds futures were pricing in a roughly 44% probability of a September increase, up from 36% before the inflation data, according to Reuters.
Gold is particularly sensitive to interest-rate expectations because it does not generate interest income. Higher rates can therefore reduce its appeal relative to interest-bearing assets. A stronger US dollar can also put pressure on gold, as bullion is priced in dollars.
Investors are now awaiting Fed Chairman Kevin Warsh’s speech at Jackson Hole, which could provide further clues about the central bank’s approach to inflation and interest rates.
Peter Grant, vice-president and senior metals strategist at Zaner Metals, said gold was effectively consolidating after its recent gains. However, he remains bullish on the metal’s longer-term prospects, saying prices could climb back above $5,000 an ounce this year and potentially reach fresh record highs by the second quarter of 2027.
Warsh next
The next major test for gold could come from Federal Reserve Chairman Kevin Warsh’s speech at the Jackson Hole symposium on Friday.
Investors will closely watch his remarks for clues about the Fed’s approach to inflation and interest rates. A less hawkish message that reduces expectations of a September rate hike could support gold, while signals that the central bank is prepared to keep policy tighter for longer could put renewed pressure on the metal.
Liu Shiyao, an analyst at Chinese brokerage Zijin Tianfeng Futures, said gold’s ability to hold around its five-day moving average continued to signal underlying strength. The metal has also climbed above its 200-day moving average, a widely followed indicator of longer-term market momentum.
Liu said the tone of Federal Reserve Chairman Kevin Warsh’s upcoming speech could be crucial for gold. “If Warsh’s speech does not lay the groundwork for a rate hike in September, then it will likely be interpreted by the market as dovish,” Liu said.
Geopolitics matters
Interest-rate expectations are not the only factor investors are watching. Geopolitical tensions and uncertainty in the Middle East are also supporting demand for gold as a safe-haven asset, helping the metal remain resilient despite changing expectations for US monetary policy.
Any escalation in regional tensions could strengthen safe-haven demand, while signs of de-escalation could reduce some of that support.
Iran and Oman are continuing discussions on a possible arrangement for commercial navigation through the Strait of Hormuz, with the prospect of restoring maritime traffic helping ease some market concerns. Oil prices have fallen as investors assess the possibility of a reopening, although major uncertainties remain.
Any development affecting the strategically important waterway could influence broader financial markets, particularly oil prices, currencies and demand for safe-haven assets such as gold. The metal has also continued to draw support from wider concerns over government debt, currency valuations and financial-market stability.
India diverges
Gold prices in India moved in the opposite direction in the latest rates provided. The 24K rate fell to ₹162,980 per 10 grams, from ₹163,750 previously, marking a decline of ₹770.
The 22K rate dropped to ₹149,400 per 10 grams, compared with ₹150,100 previously, down ₹700.
The divergence between gold prices in the UAE and India highlights why consumers should not rely solely on international bullion prices. Currency movements, taxes, import duties, premiums and local market conditions can all influence the final price paid by buyers.
For Dubai shoppers, the broader picture is that gold remains at elevated levels despite short-term volatility. International gold rose on Thursday as investors focused on upcoming comments from Federal Reserve Chair Kevin Warsh, with markets seeking clearer signals on the US interest-rate outlook.
The direction of US monetary policy — and what Warsh signals in his Friday speech — could determine whether gold resumes its upward momentum or enters a period of consolidation.
