Dubai gold prices drop to lowest level in nearly a month

Dubai: Gold prices in Dubai opened lower on Wednesday, giving jewellery buyers another chance to lock in rates after a steady pullback from last month’s highs. (Check latest UAE gold prices here, alongside prices in Saudi Arabia, Oman, Qatar, Bahrain, Kuwait, and India.)

The 24-karat variety stood at Dh481.50 per gram at 7:33 am, down from Dh485.25 on Tuesday. The 22-karat variety was priced at Dh446, compared with Dh449.25 a day earlier.

The latest move means 24-karat gold has lost Dh3.75 per gram in a day, while 22-karat gold is cheaper by Dh3.25 per gram.

Prices fall for third straight day

Dubai gold rates have now fallen for three consecutive days, after 24-karat gold stood at Dh492.75 on June 28 and eased to Dh485.75 on June 29, Dh485.25 on June 30 and Dh481.50 on July 1.

The drop has brought local prices to the lowest level since early June. On June 2, 24-karat gold was at Dh542.50 per gram, while 22-karat gold stood at Dh502.25. Since then, 24-karat gold has fallen by Dh61 per gram, while 22-karat gold is lower by Dh56.25 per gram.

That marks a decline of more than 11% from the June 2 level for 24-karat gold, a sizeable correction for buyers who had stayed away when prices were trading near record levels.

Global bullion weakens

The decline in Dubai prices came as global bullion fell for a third day, with traders weighing signals that the US Federal Reserve may still move to tighten monetary policy and tracking progress in US-Iran peace talks.

Spot gold slipped below $3,980 an ounce after losing 2% over the previous two sessions, taking prices to their lowest level since November.

Fed Bank of Cleveland President Beth Hammack said on Tuesday that she was not seeing much evidence that interest rates were restraining the US economy, and that the central bank may need to raise rates to bring inflation back to its 2% target.

Higher borrowing costs usually weigh on gold because the metal does not offer interest or dividends, making it less attractive when returns on cash and bonds rise.

Buyers watch for further dips

Gold had a weak second quarter, falling 14% and posting its worst quarterly performance since 2013. The metal had reached a record in January, but expectations of possible US rate hikes later this year have since weighed on prices.

US employment data due later this week will be closely watched by traders. Recent figures showed job openings were little changed in May, suggesting that labour demand remains steady and giving the Fed more room to keep policy tight while it studies inflation trends.

Technical indicators are also adding pressure. Gold’s 200-day moving average recently dropped below its 50-day moving average, a pattern often called a death cross by traders and seen by some investors as a sign that a longer downtrend may be forming.

- With inputs from Bloomberg.