Gold prices in Dubai experienced an uptick on Thursday morning, with 24K reaching Dh541 per gram and 22K at Dh501. This development positions buyers at the highest local rates observed since early June. At 9 am, 24K gold was priced at Dh541 per gram, an increase from Dh540.75 on Wednesday, while 22K rose to Dh501 from Dh500.75. The last occasion when 24K surpassed Thursday’s level was June 2, when it was valued at Dh542.50 per gram, whereas 22K was priced at Dh502.25. The recent uptick signifies a robust trend for Dubai gold prices throughout August. The 24K rate was at Dh492.25 on August 4, subsequently surpassing Dh500 two days later and achieving Dh533.25 on August 12. It declined to Dh523.50 the next day before continuing its ascent, achieving Dh540.75 on Wednesday and Dh541 on Thursday morning. The 22K variety has exhibited a similar trajectory, increasing from Dh455.75 on August 4 to Dh501 on Thursday. Global gold maintains a position above $4,500. The increase in gold prices in Dubai coincides with international gold trading surpassing $4,500 an ounce, following a rally exceeding 3% in just one session.

Gold reached its highest level since early June near $4,520 during Asian trading before relinquishing some gains as the US dollar appreciated. Rania Gule – MENA, stated that the pullback does not necessarily indicate the conclusion of the broader ascent. “I do not see this decline as a clear signal that the bullish trend has ended,” Gule said, describing the retreat from the recent peak as a natural bout of profit-taking following the rally. The market currently finds itself in a state of tension, influenced by anticipations surrounding US interest rates alongside declining Treasury yields. Minutes from the Federal Open Market Committee’s July meeting revealed ongoing apprehensions regarding inflation, with multiple policymakers suggesting that an additional rate increase may be warranted should inflation fail to subside adequately. The Fed maintained interest rates within the 3.50% to 3.75% range during that meeting, despite the preference of three officials for a 25-basis-point increase.

Heightened expectations for interest rates may bolster the US dollar and increase the opportunity cost associated with holding gold; however, declining Treasury yields have persistently offered support to the precious metal. The US Treasury Department’s decision to expand long-term debt buyback operations contributed to a decline in yields, even in the context of the Fed’s hawkish stance. Gold’s capacity to sustain levels above $4,500 will be scrutinised in the wake of the recent rally. Gule indicated that a sustained close above the level would hold greater significance than a fleeting intraday movement through it, whereas a retreat below could instigate additional profit-taking. “In the short term, I believe gold has a good chance of maintaining its positive momentum as long as it remains above the $4,500 area,” she said. Geopolitical risks are influencing the outlook, especially tensions between the US and Iran and the potential for disruptions to energy flows throughout the region.

Gule indicated that these developments may elevate demand for safe-haven assets, while rising oil prices could further contribute to inflationary pressures and impact the Fed’s approach to interest rates. Attention now shifts to US economic indicators, encompassing initial jobless claims and the Philadelphia Fed Manufacturing Index. Expectations place initial jobless claims at 210,000, a slight increase from the previous figure of 209,000. Meanwhile, the Philadelphia Fed Manufacturing Index is anticipated to decline to 24.1, down from 41.4. Gule indicated that weaker employment figures might diminish expectations for additional rate hikes, thereby bolstering gold, whereas exceptionally strong data could strengthen the dollar and exert downward pressure on the precious metal. “My base-case scenario is elevated volatility with an upward bias, provided gold remains stable above the $4,500 level,” she said.