Dubai gold buyers see prices ease after weekend high

Dubai: Gold prices in Dubai opened slightly lower on Monday after holding steady through the weekend, with the 24-karat variety priced at Dh501 per gram as of 9:35 am, compared with Dh503 on Sunday. (Check latest UAE gold prices here, alongside prices in Saudi Arabia, Oman, Qatar, Bahrain, Kuwait, and India.)

The 22-karat variety also eased to Dh464 per gram, down from Dh466 on Sunday, as global gold gave back part of last week’s gains during early Monday trade.

The latest move still leaves Dubai gold well above late-June levels, when 24-karat gold stood at Dh485.25 on June 30 and Dh485.75 on June 29. Prices climbed through the first week of July, rising from Dh489.75 on July 1 to Dh494.75 on July 2, before moving above Dh501 on July 3 and holding at Dh503 over the weekend.

Gold steadied near $4,160 an ounce after posting its first weekly advance since May, supported by reduced expectations that the US Federal Reserve will raise interest rates.

Ahmad Assiri, Research Strategist at Pepperstone, said gold rallied last week after markets read comments from Fed Chair Warsh as less hawkish than previously priced. That pushed US Treasury yields lower, weakened the US dollar slightly and lifted gold toward $4,200 as investors reduced expectations for monetary tightening.

Gold tends to benefit when rate-hike expectations ease, since lower yields reduce the opportunity cost of holding the metal.

Assiri said gold gave back part of its gains in the early Monday session, although overall sentiment stayed modestly positive after weeks of selling pressure.

“In my view, gold is likely to remain under pressure, with elevated yields continuing to cap demand. That said, the outlook looks considerably brighter than earlier in the past few weeks, when the market was eyeing a move towards the 3900 range,” he said.

“At the core of this, markets still cannot pin down Warsh's policy outlook, as he continues to avoid providing forward guidance hence introducing high volatility into the yield curve and in trun the metal.”

Dubai gold prices had seen a more volatile run in June, with 24-karat gold reaching Dh522.25 on June 16 before sliding to Dh486 on June 25 and Dh485.25 by June 30.

The start of July has been firmer, with 24-karat gold moving back above Dh500 by July 3. The 22-karat variety followed the same pattern, rising from Dh453.50 on July 1 to Dh466 over the weekend before easing to Dh464 on Monday.

Soft US jobs data and lower energy prices also helped traders reduce bets on further monetary tightening. Oil dropped on Monday as more tankers moved through the Strait of Hormuz and OPEC+ signalled higher supplies, easing some of the inflation pressure that had weighed on expectations for borrowing costs.

- With inputs from Bloomberg.