Gold prices in Dubai showed a recovery on Thursday morning, increasing by 4 dirhams. The rise in the precious metal was supported by falling oil prices and weakening expectations of a US interest rate hike.
The 24K option traded at the market opening on Thursday at 503.75 dirhams per gram, which is higher than the 499.75 dirhams recorded at the close of the markets on Wednesday. Other varieties of yellow metal also saw growth: 22K cost 466.5 dirhams, 21K cost 447.25 dirhams, 18K cost 383.25 dirhams, and 14K cost 299 dirhams per gram.
Globally, spot gold traded at $4180 per ounce, showing a 0.6 percent increase according to UAE time at 9:02 AM. Silver rose by 1.59 percent, reaching $61.2 per ounce.
Financial analyst and Investment Director at Century Financial, Vijay Valecha, noted that gold recovered after a key technical support level. He added that the drop in oil prices occurred against the backdrop of crude oil exports from the region recovering to approximately 80 percent of pre-war levels. Nevertheless, persistent inflation concerns and the probability of further rate hikes continue to pose risks to gold.
Valecha reported that investors have lowered the probability of a rate hike in October to almost 50 percent compared to previous estimates of 70 percent. This statement followed comments by New York Fed President John Williams, who suggested that one more rate adjustment might be sufficient by the end of the year.
Furthermore, Valecha pointed to rising US Treasury yields as a risk to gold's recovery, noting that the 30-year yield exceeded 5.61 percent, the highest level since 2002. He concluded that upcoming US economic data, including the Personal Consumption Expenditures (PCE) index and the non-farm payroll report, will be key to gold's short-term direction. In his view, gold may retest support around $4120 before continuing to rise.