Dubai gold prices rebound above Dh500 after steep midweek fall

Dubai: Dubai gold prices climbed back above the Dh500 mark on Friday morning, recovering from a sharp midweek slide that briefly pulled 24-karat gold below Dh500 per gram and gave shoppers a short buying window. (Check latest UAE gold prices here, alongside prices in Saudi Arabia, Oman, Qatar, Bahrain, Kuwait, and India.)

At 9.53 am on Friday, 24-karat gold was priced at Dh505 per gram, slightly lower than Dh506.50 on Thursday evening, while 22-karat gold stood at Dh467.75 compared with Dh469 the previous evening.

The recovery came after a volatile Thursday session, when 24-karat gold was priced at Dh491.75 per gram at 9.18 am and 22-karat gold stood at Dh455.25, before both categories rebounded strongly by the evening.

Prices remain well below early June highs

Gold remains much cheaper than it was at the start of the month, even after the latest rebound.

The 24-karat variety opened June at Dh539.75 per gram and touched Dh542.50 on June 2, while 22-karat gold stood at Dh500 on June 1 and rose to Dh502.25 the following day. Prices then stayed elevated through June 4, when 24-karat gold was at Dh538.50 and 22-karat stood at Dh498.50.

The correction gathered pace after that, with 24-karat gold easing to Dh522.50 on June 5 and holding around Dh521.75 on June 6 and 7, before slipping to Dh521.50 on June 8. The sharper move came this week, with 24-karat falling to Dh514.25 on June 9 and then dropping to Dh492.50 on June 10, while 22-karat gold fell from Dh476.25 to Dh456 over the same period.

Friday’s price of Dh505 for 24-karat gold shows that the market has recovered from Thursday morning’s low, but it is still Dh37.50 below the June 2 level, keeping buyers focused on whether the rebound has more room to run or whether prices will soften again.

“Gold stabilised to a certain extent near multi-month lows amid slightly weaker bond yields and a steady dollar today," said Frank Walbaum, Market Analyst at Naga. "However, the metal could remain exposed to the downside if inflation concerns increase and yields and the dollar return to the upside."

The broader market backdrop is still difficult for bullion, especially because gold does not offer interest income and tends to come under pressure when investors expect interest rates to stay higher for longer.

Walbaum said investors are watching central bank signals closely, with markets in Europe focused on the European Central Bank’s policy decision and US inflation still running above the Federal Reserve’s target.

“Meanwhile, in the United States, the latest inflation figures remained well above the Federal Reserve’s target, reinforcing expectations that interest rates may need to stay elevated for longer,” he said.

Middle East tensions keep gold in focus

Gold’s latest rebound also followed a fresh shift in Middle East risk, after US President Donald Trump said the US could sign a deal with Iran over the weekend to end the war that has rattled global markets and fuelled inflation concerns.

Bullion had posted its biggest gain since March in global trading after Trump said Iran’s supreme leader had agreed to a peace deal, although he added that the pact had not been finalised and described it as “a very strong memorandum of understanding that is a little bit conceptual.” Tehran has not confirmed the agreement.

The comments followed Trump’s decision to call off a third day of airstrikes on Iran. US forces had struck Iran for two days, while Tehran responded by announcing the closure of the Strait of Hormuz to all vessels.

The conflict has disrupted energy flows through Hormuz, pushed oil prices higher and raised the risk that inflation could stay elevated for longer, making it harder for central banks to cut interest rates.

- With inputs from Bloomberg.