UAE gold prices continue to trade below Dh500 per gram

Gold prices continued to trade below the Dh500 mark on Monday morning, extending last week's decline as investors weighed a stronger macroeconomic backdrop against signs of resilience in the precious metal.

24K gold price was trading at Dh488.75 per gram at the market open on Monday, down from Dh496.50 per gram at the close of the markets on Friday.
Among the other variants of the precious metal, 22K, 21K, and 18K, were trading at Dh452.50, Dh434, and Dh372, respectively.

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Spot gold was trading at a low of $4,070.49 an ounce as of 9:10am UAE time, down 0.41 per cent. Silver also slipped 0.91 per cent, trading at $58.5 an ounce.

Ole Hansen, Head of Commodity Strategy at Saxo Bank, said gold had shown notable resilience despite facing several headwinds, including higher oil and fuel prices, hawkish signals from the minutes of the US Federal Reserve's latest policy meeting, and rising bond yields.

"Considering what was thrown at bullion, gold has held up well," Hansen said, noting that the metal found support ahead of the $4,050 level before rebounding as the US dollar and bond yields eased.

He said the recent price action suggests gold has moved from "capitulation to consolidation", indicating that the phase of forced selling may have largely run its course, even if the metal is not yet ready to resume its previous upward trend.

According to the analyst, sellers are finding it increasingly difficult to push prices significantly lower, while the US dollar may also be showing signs of losing momentum despite heightened geopolitical tensions and expectations of a more hawkish interest rate outlook.

Looking ahead, Hansen said the outlook for gold will largely depend on inflation, energy prices and the strength of the US labour market. A sustained rise in oil prices could keep inflation elevated and prompt markets to price in a more aggressive response from the Federal Reserve.

However, he believes recent signs of weakness in US employment data make an immediate rate hike less likely, leaving investors focused on upcoming economic data that could determine the next move for both the dollar and precious metals.

Written by

Hind Aldah

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Hind Aldah is a business reporter based in Sharjah. In her spare time, you will find her playing classical guitar, painting amateur oil paintings, or crocheting the same old scarf that leads nowhere.