Gold buyers in the UAE experienced a degree of relief on Thursday morning as local prices declined from their peak levels observed in August. However, the rates continue to be significantly elevated compared to the beginning of the month. At 9:24 am, the price of 24-karat gold stood at Dh529.75 per gram, reflecting a decrease of Dh3.50 from the previous day’s price of Dh533.25. The 22-karat variety decreased by Dh3.25, now priced at Dh490.75, down from Dh494 the previous day. The decline follows Wednesday’s rates, which reached the highest levels recorded this month, resulting in slightly lower prices for shoppers considering jewellery purchases on Thursday.

Thursday’s pullback has diminished merely a fraction of the gains observed in the initial half of August. Twenty-four-karat gold is currently priced at Dh42.50 per gram above its August 1 level of Dh487.25, whereas 22-karat gold has increased by Dh39.50 from Dh451.25 during the same timeframe. 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 ascended beyond Dh500 by August 6, surpassed Dh523 the subsequent day, and ultimately attained Dh533.25 on August 12. Twenty-two-karat gold exhibited a comparable trajectory, increasing from Dh449.50 on August 3 to Dh472.75 on August 6 and Dh485 by August 7, ultimately achieving Dh494 on Wednesday.

Internationally, gold remained close to $4,400 an ounce as softer US inflation data alleviated the pressure on the Federal Reserve to increase interest rates. Bullion experienced an increase of up to 0.9% and momentarily attained a 10-week peak before retracing some of the gains. US consumer prices increased by 0.1% in July compared to the prior month, with a weaker jobs report from last week also impacting expectations regarding the trajectory of US monetary policy. Investors are currently anticipating additional employment and inflation data in advance of the Federal Reserve’s forthcoming meeting, as well as comments from Fed Chairman Kevin Warsh at the Jackson Hole symposium later this month. Higher interest rates typically exert downward pressure on gold, as the metal yields no interest. Conversely, anticipations of a less aggressive monetary policy can enhance its attractiveness.

Oil prices are on track for a weekly gain after a period of volatile trading, as markets remain attentive to the ongoing negotiations between the US and Iran aimed at resolving the conflict and reopening the Strait of Hormuz. Gold has maintained its position above the $4,000-an-ounce threshold in recent weeks, bolstered by a resurgence in investor demand and heightened purchases by central banks, notably from China. This week’s advance also pushed gold above its 100-day moving average for the first time since April.