Gold prices in the UAE fell on Friday, September 11, with 24K gold dropping to AED 522 per gram. A stronger US dollar and higher Treasury yields weighed on the precious metal.
The latest decline adds to the recent pressure on local gold prices. The 24K rate fell by nearly AED 38 per gram since August 25.
At the opening of trade, 22K gold was priced at AED 483.50 per gram. The rate for 21K gold stood at AED 463.50 per gram. The 18K rate was AED 397.25, while 14K gold traded at AED 310 per gram.
Spot gold was trading at USD 4,331 an ounce, down 0.8%. Silver also declined, falling 1.1% to USD 63.60 an ounce. Simon-Peter Massabni, head of business development at XS.com, said gold faced strong selling pressure during Thursday’s trading session. He pointed to the recovery in the US dollar and higher Treasury yields as key factors.
One of the main factors behind the decline was the rebound in US Treasury yields. The 10-year Treasury yield moved back toward 4.90%. In contrast, longer-term yields remained under pressure after the US government's plan to repurchase up to USD 6 billion in longer-dated debt fell short of what some market participants had expected. Higher yields increase the opportunity cost of holding gold, an asset that does not generate interest.
"The dollar also regained ground against major international currencies after recently trading near two-week lows. The combination of higher yields and expectations that interest rates will remain elevated once again increased the relative attractiveness of dollar-denominated assets. For gold, a stronger dollar is generally a negative factor because it makes the metal more expensive for investors using other currencies," he said.
Oil prices also moved higher, with Brent crude trading above USD 105 a barrel and WTI above USD 100. Rising energy prices have added to concerns over inflation.
The developments come as markets assess interest-rate expectations and movements in the dollar. These factors continue to influence demand for gold, which does not provide interest income to investors.
For UAE buyers, the latest move means the price of 24K gold moved further away from its recent levels recorded in the local market.
Also Read: Dubai Gold Rate: 24K Falls to AED 531.25, 22K at AED 492 as US Inflation Data Looms