Dubai gold edges lower after strong US jobs shock markets

Dubai: Gold prices in Dubai slipped slightly Thursday morning after global bullion retreated on fresh US economic data that shifted interest rate expectations. At 9 am, 24K traded at Dh610.25 against Dh610.50 the previous day while 22K stood at Dh565 compared with Dh565.25, reflecting a marginal decline that tracked international price movements. (Check latest UAE gold prices here, alongside prices in Saudi Arabia, Oman, Qatar, Bahrain, Kuwait, and India.)

Local buyers continue to monitor global signals closely since short term direction has become tied to interest rate forecasts and macroeconomic indicators, which directly affect bullion demand and currency trends. Strong US labour market figures released overnight prompted traders to delay expectations for a Federal Reserve rate cut, reducing immediate support for non-yielding assets such as gold.

Price action during the past four weeks shows a volatile pattern marked by sharp rallies followed by rapid corrections. Mid January levels sat near Dh558 for 24K and Dh517 for 22K before climbing steadily through the month, accelerating late January when 24K surged beyond Dh639 and 22K touched Dh591.75. Early February opened with a steep retreat that briefly pulled 24K down toward Dh564 before values rebounded above Dh610 this week, highlighting a market driven by fast shifts in global sentiment and speculative positioning.

International bullion dropped as much as 0.8% Thursday after rising 1.2% in the previous session. Strong payroll growth and an unexpected decline in unemployment signalled continued resilience in the US labour market, encouraging traders to push their timeline for the next rate cut to July instead of June. Higher borrowing costs typically pressure gold because the metal does not generate interest income.

Despite the dip, prices remain well above $5,000 an ounce and have recovered roughly half the losses triggered by a rapid selloff at the start of the month. Late January saw bullion surge to a record above $5,595 before speculative momentum overheated the rally and triggered a two session plunge of about 13%.

Major banks continue to forecast gains later in the year on expectations that geopolitical tensions, diversification away from traditional reserve assets, and questions around central bank independence will sustain demand. BNP Paribas expects bullion to reach $6,000 an ounce by year end while Deutsche Bank and Goldman Sachs also maintain bullish outlooks.

Silver fell as much as 3.2% Thursday after a sharp rally a day earlier, extending a period of unusually large price swings. The metal has dropped about one third from its January peak following volatile trading conditions that analysts describe as the most intense since 1980. Smaller market size and thinner liquidity typically amplify price movements in silver compared with gold.

Recent pressure came despite data showing the global silver market heading toward a sixth consecutive supply deficit driven by investment demand. Chinese inventories remain tight due to strong industrial consumption, prompting the Shanghai Futures Exchange to restrict certain hedging participants from carrying futures contracts into delivery in an effort to stabilise stock levels.

Gold’s direction in the coming weeks will depend heavily on interest rate expectations and investor appetite for safe haven assets, leaving retail buyers in the UAE watching global indicators as closely as local price boards.

- With inputs from Bloomberg.