Dubai gold prices hit nearly 80-day high, 24K crosses Dh540 and 22K tops Dh500

Dubai: Gold prices in Dubai climbed again on Thursday morning, taking 24K to Dh541 per gram and 22K to Dh501, putting buyers face to face with the highest local rates seen since early June.

At 9 am, 24K gold stood at Dh541 per gram, up from Dh540.75 on Wednesday, while 22K rose to Dh501 from Dh500.75. The last time 24K was above Thursday’s level was June 2, when it stood at Dh542.50 per gram, while 22K was priced at Dh502.25.

The latest increase extends a strong run for Dubai gold prices during August. The 24K rate was at Dh492.25 on August 4 before climbing past Dh500 two days later and reaching Dh533.25 on August 12. It eased to Dh523.50 the following day before resuming its climb, reaching Dh540.75 on Wednesday and Dh541 on Thursday morning.

The 22K variety has followed the same path, moving from Dh455.75 on August 4 to Dh501 on Thursday.

Global gold holds above $4,500

The surge in Dubai gold prices comes with international gold trading above $4,500 an ounce following a rally of more than 3% in a single session. Gold reached its highest level since early June near $4,520 during Asian trading before giving back some gains as the US dollar strengthened.

Rania Gule, Senior Market Analyst at XS.com – MENA, said the pullback does not necessarily point to the end of the broader rise.

“I do not see this decline as a clear signal that the bullish trend has ended,” Gule said, describing the retreat from the recent peak as a natural bout of profit-taking following the rally.

The market is now caught between expectations for US interest rates and falling Treasury yields. Minutes from the Federal Open Market Committee’s July meeting showed continued concerns over inflation, with several policymakers indicating that another rate increase could become necessary if inflation does not ease sufficiently.

The Fed kept interest rates in the 3.50% to 3.75% range at that meeting, although three officials preferred a 25-basis-point increase.

Higher interest-rate expectations can support the US dollar and raise the opportunity cost of holding gold, but lower Treasury yields have continued to provide support to the precious metal. The US Treasury Department’s decision to expand long-term debt buyback operations helped push yields lower despite the Fed’s hawkish tone.

$4,500 becomes key level

Gold’s ability to remain above $4,500 will be closely watched following the latest rally. Gule said a sustained close above the level would carry more weight than a brief intraday move through it, while a fall back below could trigger further profit-taking.

“In the short term, I believe gold has a good chance of maintaining its positive momentum as long as it remains above the $4,500 area,” she said.

Geopolitical risks are also feeding into the outlook, particularly tensions involving the US and Iran and the possibility of disruption to energy flows across the region. Gule said these developments could increase demand for safe-haven assets, while higher oil prices could also add to inflation pressures and influence the Fed’s interest-rate stance.

US data could drive next move

Attention now turns to US economic data, including initial jobless claims and the Philadelphia Fed Manufacturing Index. Expectations put initial jobless claims at 210,000 compared with 209,000 previously, while the Philadelphia Fed Manufacturing Index is expected to fall to 24.1 from 41.4.

Gule said weaker employment figures could reduce expectations for further rate increases and support gold, while particularly strong numbers could lift the dollar and weigh on the precious metal.

“My base-case scenario is elevated volatility with an upward bias, provided gold remains stable above the $4,500 level,” she said.