Dubai gold dips again as global pressures cool recent rally

Dubai: Gold prices in Dubai eased on Thursday morning, giving shoppers a small breather after several sessions of elevated prices earlier this month.

The 24-karat rate stood at Dh619.75 per gram at around 9.30 am on Thursday, down from Dh623.75 recorded a day earlier. The 22-karat price dropped to Dh574, down from Dh577.50 on Wednesday. (Check latest UAE gold prices here, alongside prices in Saudi Arabia, Oman, Qatar, Bahrain, Kuwait, and India.)

The decline reflects broader global moves in bullion markets after recent US economic data shifted expectations for interest rates and strengthened the dollar.

Gold prices in Dubai have moved sharply through February and early March, showing how quickly global events are feeding into local jewellery rates.

Mid-February levels were closer to Dh600 per gram for 24-karat gold, with prices around Dh596 on February 12 before gradually climbing above Dh600 in the following days. The rally gathered pace toward the end of the month when prices moved past Dh620, and by February 28, the 24-karat rate had climbed to around Dh636.

The start of March saw an even sharper surge, with prices briefly jumping above Dh640 on March 2, marking one of the highest levels seen this year. Gains proved short-lived. Rates pulled back in the following sessions, falling toward the Dh615 range by March 9 before rebounding again above Dh620 earlier this week.

Thursday’s reading around Dh619 suggests prices remain volatile but below the peak reached earlier in the month.

International gold prices retreated for a second straight session after new US inflation data dampened expectations that the Federal Reserve could move quickly to cut borrowing costs.

Bullion fell about 1% in global trading after slipping slightly in the previous session. A stronger dollar added further pressure on gold, while rising energy prices linked to the conflict in the Middle East lifted inflation concerns.

Oil markets have been particularly sensitive to developments in the region. Brent crude climbed back above $100 per barrel on Thursday after fighting disrupted parts of the energy supply chain. Some countries have announced the largest coordinated emergency oil release on record, including a US plan to release 172 million barrels from its strategic reserves.

Higher interest rate expectations typically weigh on gold because it does not yield. Investors sometimes sell bullion to boost liquidity when other assets in their portfolios are under stress.

Despite the recent pullback, gold has still recorded strong gains this year.

The metal has risen close to 20% since the start of the year, supported by demand during periods of geopolitical tension. Trading activity has been uneven since the conflict involving Iran began at the end of February, with prices rising sharply on some days before retreating in the following sessions.

Exchange-traded fund holdings of gold have also fluctuated. Investors reduced positions last week by the largest amount seen in more than two years, though inflows returned earlier this week when prices stabilised.

Dubai’s retail gold market tends to react quickly to these global shifts because local rates track international bullion prices and reflect currency movements.

- With inputs from Bloomberg.