Dubai gold slips below Dh500 again after weekend jump
24K gold slipped to Dh497.25 while global bullion held above $4,000
At 9.22 am, 24K gold was priced at Dh497.25 per gram, down from Dh499 on Monday. The 22K variety, which is widely used in jewellery purchases, slipped to Dh460.50 from Dh462.
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The latest decline comes after Dubai gold rates touched Dh503 for both July 4 and July 5, marking the highest level so far this month. Prices had started July at Dh489.75 for 24K and Dh453.50 for 22K, before moving higher through the first weekend and then easing over the past two sessions.
Buyers get some relief
The move gives UAE shoppers a slightly better entry point compared with the weekend peak, although rates remain above where they started the month.
The 24K rate is still Dh7.50 higher than on July 1, while 22K is Dh7 above the level seen at the start of the month. This means consumers are seeing some relief from the recent high, but not a full return to early-month prices.
Globally, bullion fell for a second day after renewed attacks on shipping in the Strait of Hormuz revived concerns over energy flows through one of the world’s most important routes for oil and natural gas.
Gold dropped as much as 0.9% to near $4,125 an ounce after losing 0.3% on Monday. Oil prices rose after a tanker reported being hit east of Oman, while reports said Iran fired missiles at commercial ships transiting the Strait of Hormuz.
The rise in oil has brought inflation concerns back into focus, increasing attention on whether the US Federal Reserve could keep policy tight or even consider further rate action. Higher interest rates usually weigh on gold because the metal does not pay income.
Linh Tran, Market Analyst at XS.com, said gold has managed to recover after falling to its lowest level in nearly six months, moving back from around $3,940 an ounce to the $4,130 area.
“At one point, buying pressure pushed prices close to the USD 4,200/oz zone before gold pulled back to its current level, suggesting that a recovery has emerged, but upside momentum is still not strong enough to confirm a clear breakout trend,” she said.
Investors are now waiting for the minutes of the Fed’s June meeting for fresh signals on the rate outlook. Markets had earlier raised bets on a rate hike after a hawkish stance from new Fed Chair Kevin Warsh, although those expectations eased after weaker US jobs data last week.
Tran said the interest rate backdrop remains the main factor limiting gold’s upside, with the market still not fully ruling out a firm Fed policy stance.
“In addition, although the DXY has cooled, it remains elevated around the 100.5–100.6 area, while the 10-year U.S. Treasury yield is hovering near 4.48%,” she said. “These remain two key sources of pressure on gold, as a stronger U.S. dollar and higher yields reduce the appeal of non-yielding assets.”
$4,000 remains key level
Gold remains more than a fifth below the level seen immediately before the Middle East war, although it has recovered from a drop below the $4,000 psychological mark and key moving averages.
Tran said the current picture is not entirely negative because easing rate hike expectations have helped prevent selling from taking control, while dip-buying has repeatedly appeared near $4,000.
“The USD 4,000/oz zone is acting as a major balance point for the market, where pressure from the U.S. dollar and yields is being offset by buying demand when prices fall deeply,” she said.
A sustained hold above $4,000 could allow gold to retest the $4,180 to $4,200 area, with a possible move toward $4,300 and $4,400 if momentum improves. A clear break below $4,000 would increase the risk of fresh selling in the short term.
- With inputs from Bloomberg.
