Gold prices in Dubai steady after four-day rally as investors await Fed clues

Dubai gold prices remained steady on Wednesday after four consecutive days of rallies, with the yellow metal gaining 7 per cent last week after a pressured US dollar.

The 24K variant was trading at Dh559.25 at the market open on Wednesday, losing Dh0.75 from the close of the market on Tuesday. Among the other variants of the precious metal, 22K, 21K, 18K, and 14K, were trading at Dh517.75, Dh496.50, Dh425.50, and Dh332, respectively.

Globally, spot gold was trading at $4,642.05 per ounce, up 0.11 per cent. Silver was also up 0.55 per cent, trading at $69.08 per ounce.

Vijay Valecha, CIO of Century Financial, said gold was consolidating after three consecutive weekly gains, having briefly climbed close to $4,700 an ounce and reaching its highest intraday level since mid-May.

He said the recent rally was supported by a weaker US dollar after the US Treasury signalled plans to increase buybacks of long-dated bonds by at least $14 billion between September 9 and November 4.

“Thus, it is only natural for gold to consolidate after three back-to-back weekly gains,” Valecha said.

Attention is now turning to the Jackson Hole Symposium, where Fed Chair Kevin Warsh is scheduled to speak on Friday. Valecha said investors will be watching for clues on the Federal Reserve’s approach to inflation and interest rates.

He added that positioning in gold remains supportive, pointing to increased holdings by money managers, resilient central bank purchases and a narrowing spread between spot and futures prices.

Geopolitical tensions are also adding to gold’s appeal as a portfolio hedge, Valecha said, as the US threatens economic measures against Iran and tensions between Washington and Canada escalate following a breakdown in trade negotiations.

On the technical front, he said gold faces an immediate hurdle at $4,651 an ounce. A sustained break above that level could open the way towards $4,700 and $4,765, while support is seen at around $4,560.

Valecha also said silver was benefiting from similar factors supporting gold. Indian imports have started recovering, with 90 tonnes entering through the India International Bullion Exchange in August after six months of inactivity.

He said further shipments could ease supply tightness as jewellers restock ahead of India’s festival and wedding season, although imports would need to more than double in the second half of the year to approach 2025 levels.

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.