UAE gold prices retreat from August high, giving buyers some relief
24K gold falls Dh3.50 per gram, but remains Dh42.50 above its August 1 level
Dubai: Gold buyers in the UAE saw some relief on Thursday morning after local prices retreated from their highest levels of August, although rates remain well above where they started the month. (Check latest UAE gold prices here, alongside prices in Saudi Arabia, Oman, Qatar, Bahrain, Kuwait, and India.)
At 9:24 am, 24-karat gold was priced at Dh529.75 per gram, down Dh3.50 from Dh533.25 on Wednesday. The 22-karat variety fell Dh3.25 to Dh490.75, compared with Dh494 a day earlier.
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The decline comes after Wednesday's rates marked the highest levels recorded so far this month, leaving shoppers considering jewellery purchases with slightly lower prices on Thursday.
Prices still well above start of August
Thursday's pullback has erased only part of the increase recorded during the first half of August.
Twenty-four-karat gold remains Dh42.50 per gram higher than its August 1 level of Dh487.25, while 22-karat gold has gained Dh39.50 from Dh451.25 over the same period.
Prices initially softened during the opening days of the month, with 24-karat gold reaching Dh485.50 on August 3 before beginning a sustained climb. The rate moved above Dh500 by August 6, crossed Dh523 the following day and eventually reached Dh533.25 on August 12.
Twenty-two-karat gold followed a similar path, rising from Dh449.50 on August 3 to Dh472.75 on August 6 and Dh485 by August 7 before reaching Dh494 on Wednesday.
Gold is now up around 9% month to date, and traders seem to be tilting expectations to the upside. I also suspect dealers are contributing to some extend to the flows as they cover options exposure in contrast to last month which was an excellent environment for selling gold options and collecting premiums, given the relatively tight range of around 5%. And hence as gold breaks away from that range, dealer hedging could be adding some additional flow to the move. Middle East tensions seem to have moved slightly off the market's eyes, despite no clear development or breakthrough in Oman related talks. Rather, attention appears to have shifted toward other developments. I think this provides some marginal support for gold in the short term by allowing flow dynamics to dominate the price action, while geopolitical risk remains present in the background.Ahmad Assiri, Research Strategist at Pepperstone
Global gold holds near $4,400
Internationally, gold held near $4,400 an ounce after softer US inflation data reduced pressure on the Federal Reserve to raise interest rates.
Bullion gained as much as 0.9% and briefly reached a 10-week high before giving back part of the advance. US consumer prices rose 0.1% in July from the previous month, while a softer jobs report last week also influenced expectations around the path of US monetary policy.
Investors are now awaiting further employment and inflation data ahead of the Federal Reserve's next meeting, along with remarks from Fed Chairman Kevin Warsh at the Jackson Hole symposium later this month.
Higher interest rates generally weigh on gold because the metal does not pay interest, while expectations of less aggressive monetary policy can improve its appeal.
Middle East remains in focus
Oil prices are heading towards a weekly gain following months of volatile trading, with markets continuing to track efforts by the US and Iran to end the conflict and reopen the Strait of Hormuz.
Gold has stayed above the $4,000-an-ounce level in recent weeks, supported by renewed investor demand and increased central-bank purchases, including buying from China.
This week's advance also pushed gold above its 100-day moving average for the first time since April.
- With inputs from Bloomberg.
