Dubai gold drops Dh15.50 in two days after briefly crossing Dh500
24K gold fell to Dh485.25, down Dh15.50 from Wednesday’s move above Dh500
Dubai: Dubai gold prices moved lower on Friday afternoon, giving jewellery buyers a cheaper entry point after 24-karat gold briefly climbed above Dh500 earlier this week.
The 24-karat variety stood at Dh485.25 per gram at noon, down Dh2.25 from Dh487.50 on Thursday and Dh15.50 below the Dh500.75 recorded on Wednesday.
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Prices for 22-karat gold also declined to Dh449.25 per gram from Dh451.50 on Thursday, leaving the popular jewellery category Dh14.50 below Wednesday’s level of Dh463.75.
Gold retreats from July highs
Friday’s price leaves 24-karat gold Dh17.75 below its July peak of Dh503, reached on July 4 and July 5.
The metal started the month at Dh489.75 before climbing above Dh500 during the first week, then fell to a monthly low of Dh481.50 on July 16 and July 17.
Prices subsequently recovered and reached Dh500.75 on July 22, before retreating over the following two sessions.
The 22-karat variety followed a similar path, rising to a monthly high of Dh466 during the first week of July before dropping to Dh446 in the middle of the month.
Friday’s rate of Dh449.25 remains Dh3.25 above that monthly low, while offering buyers a lower price than the levels recorded earlier this week.
Global gold extends decline
Gold also extended its retreat in international markets, falling by as much as 0.7% to around $4,020 an ounce after declining 2% during the previous session.
Renewed escalation in the Middle East pushed Brent crude above $100 a barrel for the first time since May, raising concerns that higher energy costs could add to inflationary pressure.
Two-year US Treasury yields increased for a sixth consecutive day on Thursday, reflecting growing expectations that the US Federal Reserve could tighten monetary policy.
Higher interest rates tend to reduce the appeal of gold because the precious metal does not pay interest.
Rate hike expectations rise
Swap traders currently see a 34% probability that the Federal Reserve will increase interest rates at its meeting next week.
Markets have already priced in at least one increase in September, with the possibility of another move before the end of the year.
Additional uncertainty followed the US decision to impose duties ranging from 10% to 12.5% on imports from most major trading partners over alleged forced labour in supply chains.
Gold has traded close to $4,000 an ounce since late June, a level viewed by some traders as an important area of support.
The metal remains roughly 25% below its record high of nearly $5,600, reached before the US and Israel launched strikes on Iran in late February.
- With inputs from Bloomberg.
