The 24-karat variety stood at Dh497 per gram, an increase from Dh493.50 on Tuesday, while 22-karat gold rose to Dh460.25 from Dh457. The decision followed a week characterised by minor yet discernible fluctuations within Dubai’s jewellery market. Gold commenced July at Dh489.75 for 24-karat and Dh453.50 for 22-karat, subsequently experiencing an upward trajectory through the initial weekend of the month. The 24-karat rate reached Dh503 on July 4 and July 5, while 22-karat touched Dh466 on both days. Prices decreased to Dh499 on Monday and continued to decline on Tuesday, followed by a slight rebound on Wednesday. Global bullion exhibited limited volatility, with spot prices hovering around $4,100 per ounce following a decline of 1.4% in the prior session.

Investors are anticipating the release of the minutes from the Federal Reserve’s June meeting, scheduled for later Wednesday, to gain a more precise understanding of the duration for which US interest rates may stay elevated. Bullion faced downward pressure following the Fed meeting, as new Chair Kevin Warsh adopted a more hawkish stance than the markets had anticipated. Weaker-than-expected jobs data last week diminished confidence in a near-term rate cut, facilitating gold’s resurgence above the $4,000-an-ounce threshold. Elevated interest rates typically exert downward pressure on gold, as the asset yields no interest income. Concurrently, a robust dollar can render bullion pricier for purchasers utilising alternative currencies. Renewed US military action in the Gulf has introduced an additional layer of uncertainty for commodities.

US Central Command announced it executed “powerful strikes” in response to Iranian assaults on shipping in the Strait of Hormuz, shortly after Washington rescinded a waiver that permitted Tehran to sell oil on the global market. Crude prices increased following the announcement, heightening concerns that elevated energy costs may contribute to inflationary pressures, complicating the Federal Reserve’s ability to lower interest rates in the near term. That combination positions gold in a state of tension, balancing safe-haven demand driven by geopolitical risk against the pressures stemming from elevated borrowing costs. Gold has declined by over 20% since the onset of the Iran war in late February, as profit-taking has concluded a three-year bull market, resulting in the metal entering a bear market last month.

There remains scant evidence that investors are establishing substantial short positions in anticipation of more pronounced losses. China’s central bank increased its gold purchases in June, marking the continuation of its longest buying streak since at least 2015. The World Gold Council’s latest survey also indicated that a record share of central banks anticipate increasing their gold reserves in the upcoming year, implying that official-sector demand continues to serve as a crucial support even amid volatile trading.