UAE gold price stable as 22K trades below Dh500 per gram

Gold prices in Dubai remained largely stable on Tuesday morning following a strong rally last week and a hawkish speech by US Federal Reserve Chairman Kevin Warsh on Friday.

Dubai Gold Prices on Tuesday

The 24K gold rate stood at Dh533.50 per gram at the market opening on Tuesday, up Dh0.75 from the previous market close.

Other gold variants were trading at:

22K: Dh494 per gram
21K: Dh473.75 per gram
18K: Dh406 per gram
14K: Dh316.75 per gram
Globally, spot gold fell 0.09% to $4,426.10 per ounce as of 9:20am UAE time. Meanwhile, silver edged up 0.05% to $66.29 per ounce.

Fed Comments Weigh on Gold

The slight decline in global gold prices followed comments from Fed Chair Kevin Warsh, who pledged to fight inflation. His remarks increased expectations that the US central bank could potentially raise interest rates before the end of the year.

According to Ole Hansen, Head of Commodity Strategy at Saxo Bank, the pressure on bullion continued into this week after gold closed below its 200-day moving average on Friday.

$4,328 Seen as Key Support

Hansen identified around $4,328 per ounce as the next important support level for gold. This represents the 50% retracement of the metal’s August rally.

He also highlighted the importance of monitoring the US dollar and bond yields, particularly amid the longer-term fiscal challenges posed by the country’s debt, which is around $40 trillion.

Analysts See Limited Risk of Immediate Rate Hike

Despite the recent market movements, analysts at Julius Baer do not expect the Federal Reserve to raise interest rates in the immediate future, saying inflationary pressures are likely to continue easing.

Carsten Menke, Head of Next Generation Research at Julius Baer, said that while gold and silver could experience short-term sentiment-driven fluctuations, greater clarity around US monetary policy will be important in determining longer-term investor demand for the precious metals.

Gold Market Outlook

Dubai gold prices are therefore expected to remain sensitive to US interest-rate expectations, inflation data, the dollar and bond yields. While the recent rally has lost some momentum, analysts continue to watch monetary policy closely for signals about the next major move in gold prices.