Gold prices in Dubai were largely stable on Monday as Navratri began in India, with 24K gold trading at AED 505.5 per gram. Investors are also watching international gold prices ahead of a key US inflation report that could influence the metal’s next move.
Dubai Jewellery Group data showed 22K gold at AED 468 per gram, while 21K gold was priced at AED 448.75. The 18K variant traded at AED 384.75 per gram. Meanwhile, 14K gold, the most affordable option among the listed categories, stood at AED 300 per gram.
Navratri is a nine-day Hindu festival during which many Indian families buy gold jewellery, coins and bars. Gold purchases during the period are associated with prosperity and good fortune, making the festival an important occasion for jewellery retailers.
Internationally, spot gold fell 0.16% to USD 4,188 an ounce, while silver declined 0.14% to USD 223.55 an ounce.
Simon-Peter Massabni, head of business development at XS.com, said gold was approaching a crucial stage as it traded near USD 4,185 an ounce and attempted to regain the USD 4,200 mark.
“One of the first factors supporting gold is the weakening US dollar and the decline in Treasury yields, both of which could give the precious metal more room to recover. A weaker dollar makes gold cheaper for holders of other currencies, while lower yields reduce the opportunity cost of holding an asset that doesn't generate regular income. However, I expect these supportive conditions to hold only if yields continue to move lower. If the dollar regains strength and Treasury yields rise again, gold could quickly lose much of its recent momentum,” he added.
Massabni identified the US Consumer Price Index (CPI) report due this week as a major factor for gold prices. The data could shape expectations for the Federal Reserve’s monetary policy and influence bond yields.
Also Read: Dubai Gold Price Today: 24K Gold Falls to AED 523.50 Per Gram
Massabni said stronger-than-expected inflation could revive expectations of further interest rate increases. That could lift the US dollar and Treasury yields, putting pressure on gold.
“Markets are not monitoring inflation as an isolated economic indicator, but rather as a key determinant of expectations for the Federal Reserve’s monetary policy. If inflation comes in below expectations, bets on tighter monetary policy could ease, and yields could decline, creating a more favorable environment for gold to extend its gains.”
He expects market volatility to rise before the report. The reaction to any inflation surprise could prove more important than recent price movements.