Gold prices in Dubai have fallen by more than Dh48 per gram over the past month. This comes amid ongoing instability in global gold markets. The fall in prices came after hitting a record high at over Dh630 per gram in the recent past.
This fall in gold prices comes as a relief for every UAE-based buyer who delayed purchasing gold given the previous surge in its prices.
Prices for 22K, 21K, 18K, and 14K gold fell to Dh481.25, Dh461.25, Dh395.50, and Dh308.50 per gram, respectively. The global spot gold was trading at $4,310 per ounce, down 0.45 per cent.
The recent fall in gold prices reflects changing expectations around US monetary policy. Strong economic indicators, particularly employment data from the United States, have strengthened the case for interest rates staying higher for longer.
Gold investments usually become less appealing at times of high interest rates since gold does not bear any interest or produce any income. This prompts investors to look into investment vehicles that pay better during such times. Experts suggest that there has been added pressure as a result of a stronger US dollar. Since bullion prices are denominated in US dollars across the world.
Looking ahead, analysts foresee that prices of gold will still be influenced by US inflation numbers as well as the Fed's statements about whether the rates will remain high for a considerable period of time.
Jewellers and market participants report renewed interest from shoppers looking to take advantage of lower rates. Wedding-related purchases and festive buying have also started to pick up as consumers view the decline as an opportunity.
Geopolitical risks could support gold prices as investors continue to view the metal as a safe-haven asset. Market players are also paying attention to the economy and politics for any hints on the future market forecast.
Also read: Dubai Gold Market Update: 24K at AED 533.25, 21K at AED 473.50; Buyers See Relief