Dubai gold prices opened lower on Monday, with 24-karat metal down Dh11 a gram after the sell-off in world gold prices and concerns about more US interest rate hikes and a standoff in the Strait of Hormuz. Dubai Gold Rate 24K
In the local market, dealers were quoting 24-karat gold at Dh505.50 per gram compared with Dh516.50 per gram on Friday. Gold prices across different Karats were also lower with 22-karat gold at Dh468 and 14-karat gold at Dh300.
Meanwhile in world gold prices, spot gold was down 1.88 percent at $4,197.54 an ounce by 8.30am UAE time, dipping below the $4,200 threshold, following a near two percent fall last week, with silver down 3.41 percent at $61.98 and platinum and palladium down more than two percent each. The dollar index rose 0.1 per cent today, after rising about two per cent this month.
Energy markets are shaping sentiment. Oil rose after Tehran signalled it would not soften its terms for reopening the strait, one day after US President Donald Trump rejected a seven-day proposal from Iran.
Trump told Axios he expects talks to resume this week. With the US-Iran conflict now in its eighth month, Brent crude has climbed more than 70 per cent so far this year.
Higher energy costs are feeding inflation worries at the US Federal Reserve. Policymakers unanimously endorsed a quarter-point rate rise earlier this month, and several have hinted at additional tightening. Markets currently assign about a 65 per cent probability to another increase in October.
Justin Lin, an analyst at Global X ETFs, told Bloomberg that gold remains closely linked to oil and to hopes of an end to the Middle East conflict.
He said many traditional buyers are staying away until the outlook clears, while sellers are responding to rising real yields.
Gold has traded between $4,230 and $4,510 through September, well short of its record near $5,600 reached in January.
Corporate activity in the sector has continued, however: South Africa’s Gold Fields approached Australia’s largest gold producer, Northern Star Resources, but was turned down. UAE Interact
