Jewellers in Dubai said sales in the UAE have picked up due to lower prices and India’s decision to increase import duty on gold and silver earlier this month
Gold prices were steady in Dubai on Thursday morning, but were still trading Dh24 below this month’s peak.
The price of 24K gold stood at Dh546.75 per gram at the market open on Thursday, slightly lower than Dh547.5 per gram at Wednesday’s close. The 24K gold price had touched a monthly high of Dh570.75 per gram on May 11.
Among other variants, 22K, 21K, 18K and 14K gold were trading at Dh506.5, Dh485.5, Dh416.25 and Dh324.5 per gram, respectively.
Spot gold was steady at $4,533.5 per ounce on Thursday morning.
Carsten Menke, head of next generation research at Julius Baer, said gold prices are now moving more closely in line with the US dollar and US bond yields since the start of the Iran war.
“Central bank buying remains the strongest structural force in the gold market, and Western investment demand should pick up again once clarity and conviction around US monetary policy returns. Overall, we still see a favourable fundamental backdrop, although volatility is likely to remain elevated as long as the war lasts. We remain constructive on gold, neutral on silver, and reiterate our long position in the gold/silver ratio,” he added.
Wael Makarem, Financial Markets Strategist Lead at Exness, said the focus remains on inflation risks and the prospect of interest rate hikes in the US.
“Prolonged tensions in the Middle East continue to drive energy prices and inflation concerns, which could continue to push global bond yields higher, creating a challenging environment for the precious metal,” he added.
Looking ahead, Makarem said investors will closely monitor geopolitical developments and the release of FOMC minutes, both of which could generate short-term volatility.
“However, gold could find structural support from ongoing central bank purchases, which could help limit downside risk,” he added.
