Dubai gold prices remained under pressure on Thursday as investors assessed the outlook for US interest rates and monitored movements in oil prices. The 24K gold price opened at AED 517 per gram, compared with AED 516.25 at the previous session’s close. Despite the marginal daily increase, the metal has lost AED 9.25 over the past week.
Other gold categories also remained lower. The 22K price stood at AED 478.75 per gram, while 21K was priced at AED 459. The 18K and 14K variants traded at AED 393.50 and AED 306.75 per gram, respectively.
The latest weakness comes as markets reassess the Federal Reserve’s interest-rate path. Stronger-than-expected US economic data and renewed energy-price pressures have raised concerns that inflation could remain elevated.
Higher interest rates typically weigh on gold because bullion does not provide an interest income. Investors can instead shift towards yield-bearing assets when borrowing costs and bond yields rise.
Reuters reported earlier this week that gold prices declined as traders increased bets on a prolonged period of elevated US interest rates.
Oil prices have become an important factor for the gold market. Higher energy costs can increase inflationary pressure and influence expectations for tighter monetary policy.
Financial analyst and Century Financial CIO Vijay Valecha said gold has remained sensitive to oil-price movements. However, strong inflows into gold exchange-traded funds and continued central-bank demand have provided some support to bullion despite higher US real yields and a stronger dollar.
Also Read: Gold Prices Today: Strong Dollar, Rate Hike Bets Keep Bullion Under Pressure