Dubai gold price steady as oil rises, Fed rate hike weighs on market

Gold prices in Dubai remained largely steady on Tuesday morning as rising oil prices and expectations of a US Federal Reserve rate hike weighed on the precious metal.

Dubai Gold Prices Today

At the market opening on Tuesday, gold prices stood at:

24K: Dh518.75 per gram
22K: Dh480.50 per gram
21K: Dh460.50 per gram
18K: Dh394.75 per gram
14K: Dh308 per gram

Meanwhile, the global spot gold price was trading at $4,304 per ounce, down 0.18 per cent. Silver also declined 0.62 per cent to $63.26 per ounce.

Rising Oil Prices Put Pressure on Gold

Vijay Valecha, financial analyst and CIO at Century Financial, said higher oil prices were linked to the postponement of a planned meeting between Iran and several Gulf nations aimed at establishing a temporary shipping lane through the Strait of Hormuz.

The shutdown of Saudi Arabia’s East-West Pipeline over the weekend has added further pressure to global energy markets.

According to Valecha, the ongoing Middle East crisis has created an inflationary shock, pushing up prices of crude oil, natural gas and petroleum products, including diesel.

US Rate Hike Could Weigh on Gold

Valecha also noted that Saudi Arabia’s crude production has already been under pressure. Riyadh recently reported to OPEC that its crude output had fallen to its lowest level since 1990.

Meanwhile, after US data showed that price growth accelerated in August, the Federal Reserve is widely expected to raise interest rates this week.

Higher interest rates can put pressure on gold as investors may shift towards interest-bearing assets, potentially reducing demand for the precious metal.

Gold Faces Key Technical Levels

From a technical perspective, gold is forming a triangle pattern on the four-hour chart.

Valecha said the metal is showing technical weakness around the $4,310-$4,325 support zone. A break below $4,310 could trigger further bearish momentum, potentially pushing gold towards $4,225.

However, a rebound from the current support level could strengthen the bullish outlook for gold.