Dubai gold prices fall further, shedding Dh39 per gram in nine days

Gold’s slide in Dubai continued on Wednesday, with the precious metal losing more than Dh3 per gram at the market open. The 24-karat price fell to Dh519.25 per gram from Dh522 at Tuesday’s close, according to Dubai Jewellery Group data. Over nine days, it has lost nearly Dh39 per gram.

Other grades followed the decline. Prices reached Dh480.75 for 22-karat gold, Dh461 for 21-karat, Dh395 for 18-karat and Dh308.25 for 14-karat. Spot gold also fell below $4,400, trading at $4,304 an ounce after losing about 1% in early trade.

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The return of skirmishes in the Middle East, along with worsening pessimism regarding the future of Federal Reserve monetary policy for the remainder of this year, kept yields at their high peaks.

Simon-Peter Massabni, head of business development at xs.com, said high Treasury yields had returned as a source of pressure. In his view, the yields raise the opportunity cost of holding gold and have slowed its recovery from its recent upward trend.

He also pointed to renewed skirmishes in the Middle East and growing pessimism about Federal Reserve monetary policy for the rest of the year. After Kevin Warsh made pessimistic comments at Jackson Hole on Friday, markets shifted toward less favorable interest-rate expectations. CME FedWatch data put the probability of a Fed rate increase of more than half a percentage point at nearly 47%, while Warsh said inflation risks remained high and monetary conditions were not tight enough. Massabni said the pressure intensified after renewed clashes between the United States and Iran, including a US strike on two rocket launchers on Lark Island.

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Warsh generally explained that inflation risks remain high and that monetary conditions are not tight enough, which was sufficient to revive the strong negative impact of high yields.