By Staff Reporter
Gold prices in Dubai have climbed sharply in August, with 24K gaining Dh45.75 in just eight days as investors await key US inflation data.
DUBAI: Gold prices in Dubai continued their strong August recovery on Tuesday, with 24-karat gold rising to Dh531.25 per gram, its highest level in more than two months.
The 24K rate increased by Dh3 from Dh528.25 on Monday, while 22K gold also gained Dh3 to reach Dh492 per gram.
Tuesday’s price puts 24K gold at its highest level since June 4, when it stood at Dh538.50, according to 90-day price data.
The latest rally has added Dh45.75 to the price of 24K gold since August 3, when it was trading at Dh485.50. Over the same period, 22K gold has risen by Dh42.50, from Dh449.50 to Dh492.
Gold rebound accelerates
Dubai’s gold market has staged a strong recovery after prices remained below Dh500 for much of July.
The 24K rate fell to Dh481.50 on July 17 before recovering to Dh500.75 on July 22. It subsequently slipped to Dh485.25 by the end of July.
The recovery gathered pace in August. Gold moved from Dh492.25 on August 4 to Dh514 on August 5 and Dh523.75 on August 7. It then climbed to Dh528.25 on Monday before reaching Dh531.25 on Tuesday.
Despite the latest gains, 24K gold remains below its 90-day peak of Dh563.75 recorded on May 14.
Global gold climbs above $4,400
The rise in Dubai prices mirrors a renewed rally in international bullion markets, where gold moved above $4,400 an ounce on Tuesday to reach a two-month high.
Gold gained as much as 1% during the session after rising 3.6% over the previous two trading days.
Analysts said renewed investor buying, stronger inflows into gold-backed exchange-traded funds in China and improved market sentiment have contributed to the latest gains.
Ahmad Assiri, research strategist at Pepperstone, said investor flows were currently playing a major role in pushing gold higher after a period of relatively narrow price movements.
He said investors appeared to be rebuilding their exposure to the precious metal, allowing prices to recover rapidly.
Hormuz tensions add to market uncertainty
Geopolitical tensions surrounding the Strait of Hormuz and the wider US-Iran situation remain another factor being watched by investors.
However, Assiri said the recent size of the gold rally indicated that investment flows were having a greater influence on prices than geopolitical developments at present.
If the shift in sentiment continues and attracts additional investment, gold could consolidate around the $4,400 level and potentially move higher, he said.
Central bank purchases have also continued to provide support to bullion, helping gold remain above the $4,000-an-ounce threshold following earlier weakness.
US inflation report could shape next move
Investors are now turning their attention to US consumer price inflation data due on Wednesday.
The figures could influence expectations for the Federal Reserve’s next interest-rate decision, particularly following weaker US employment data released last week.
Gold tends to face pressure when interest rates rise because the metal does not generate interest income. Conversely, expectations of lower borrowing costs can increase its appeal as an investment.
Markets are also monitoring developments involving Iran after US President Donald Trump adopted a tougher position on Tehran on Monday, reducing hopes of an immediate agreement that could reopen the Strait of Hormuz.
Oil prices are also responding to the uncertainty, with Brent crude moving towards the upper $80s per barrel.
While both gold and oil are being influenced by the broader geopolitical environment, analysts say oil remains more directly sensitive to developments affecting the Strait of Hormuz, while gold is currently being driven more strongly by investor flows and improving sentiment.
