Dubai gold prices rise again: What it means for UAE shoppers today

Dubai: Gold prices in Dubai rose on Monday as the global bullion rally gathered pace, with a weaker US dollar and renewed concerns about US fiscal policy pushing investors towards the precious metal.

The gains come as gold climbed to its highest level in more than three months globally, while markets await US inflation data and a speech by Federal Reserve Chair Kevin Warsh later this week for clues on the interest-rate outlook.

In Dubai, 24-carat gold rose to Dh558.25 per gram on Monday, from Dh554.75 on Sunday, while 22-carat gold increased to Dh516.75 from Dh513.75.

That means the 24K rate has risen by Dh3.50 per gram, while 22K is up Dh3 per gram compared with the previous day's closing rates.

For consumers, the move means a shopper buying a 10-gram 24K piece of gold would be looking at a metal value of about Dh5,582.50, before any making charges, taxes or other retailer costs.

The latest move is being driven largely by the weaker US dollar, which makes gold cheaper for buyers holding other currencies.

Spot gold rose to $4,641.27 an ounce, up 0.8 per cent, after touching its highest level since May 15. Gold gained more than 5 per cent last week.

Tim Waterer, chief market analyst at KCM Trade, told Reuters gold was “looking sprightly” at the start of the week, taking its cues primarily from the softer dollar, while investors assess what higher bond yields may signal about underlying economic strains and policy uncertainty.

The next major test for bullion could come later this week, when investors receive the July Personal Consumption Expenditures (PCE) price index and hear from Fed Chair Warsh at the Jackson Hole symposium.

Waterer said traders would be watching closely for any change in the Fed's policy tone. A balanced or cautious message that keeps the door open to flexibility could support further gains in gold.

Here is how Dubai's key retail gold rates have moved:

24K: Today: Dh558.25/g; yesterday: Dh554.75/g; change: +Dh3.50

22K: Today: Dh516.75/g; yesterday: Dh513.75/g; change: +Dh3.00

The increase means UAE shoppers are paying more for gold than at the previous day's close. However, the final price of jewellery will depend on making charges and other costs added by individual retailers.

The international gold rate stood at $4,638.02 an ounce at 8.59am, up $22.30, or 0.48 per cent.

Gold also moved higher in India, tracking the international rally.

24K: Today: ₹163,960/10g; yesterday: ₹163,090/10g; change: +₹870

22K: Today: ₹150,300/10g; yesterday: ₹149,500/10g; change: +₹800

The Indian market is therefore seeing a similar upward move to Dubai, reflecting the strength of international bullion prices.

Gold's latest rally comes after the US Treasury's surprise increase in its buybacks of long-dated government debt. The move pushed bond yields and the dollar lower and revived concerns that US policy could undermine confidence in the currency.

Bloomberg reported that gold-backed exchange-traded funds added more than 28 tonnes last week, the biggest weekly inflow since January. Christopher Wong, a strategist at Oversea-Chinese Banking Corp, said the broader investor participation was encouraging and that the rally still had room to run, although some consolidation after the sharp move would be healthy.

The main near-term risks for gold, Wong said, are a renewed rise in real yields or the US dollar.

Justin Lin, an analyst at Global X ETFs, told Bloomberg he saw scope for investors to shift more heavily into precious metals because of the currency-debasement narrative.

Geopolitical tensions are also keeping investors alert. The US has threatened Iran with what it called the “greatest financial offensive ever marshalled” as Washington prepares sanctions targeting Iran's trade partners. Oil prices slipped more than $1 a barrel as investors took profits ahead of the expected announcement.