Dubai Gold Prices Pause After Rally as Investors Look for Fed Direction
Dubai gold prices held steady Wednesday following four consecutive days of gains, with the precious metal rising 7 percent last week amid a weaker US dollar.
The 24K variant traded at Dh559.25 at market open Wednesday, down slightly by Dh0.75 from Tuesday’s close. Among other variants, 22K, 21K, 18K, and 14K gold traded at Dh517.75, Dh496.50, Dh425.50, and Dh332 respectively.
Globally, spot gold traded at $4,642.05 per ounce, up 0.11 percent, while silver rose 0.55 percent to $69.08 per ounce.
Vijay Valecha, chief investment officer at Century Financial, said gold is consolidating after three straight weekly gains, having briefly touched close to $4,700 an ounce and reached its highest intraday level since mid-May. He attributed the recent rally to a weaker US dollar following the US Treasury’s signal that it 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.
Market attention is now shifting to the Jackson Hole Symposium, where Federal Reserve Chair Kevin Warsh is scheduled to speak Friday. Valecha said investors will be watching closely for signals on the Fed’s approach to inflation and interest rates. He added that gold’s positioning remains supportive overall, citing rising holdings among money managers, steady central bank purchases, and a narrowing gap between spot and futures prices.
Geopolitical tensions are also boosting gold’s appeal as a portfolio hedge, according to Valecha, pointing to the threat of US economic measures against Iran and escalating tensions between Washington and Canada following a breakdown in trade negotiations.
On the technical side, Valecha noted gold faces an immediate resistance level at $4,651 an ounce, with a sustained break above that potentially opening the path toward $4,700 and $4,765. Support is seen around $4,560.
Silver, Valecha said, is benefiting from many of the same tailwinds 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 noted that further shipments could help ease supply tightness as jewelers restock ahead of India’s festival and wedding season, though import volumes would need to more than double in the second half of the year to approach 2025 levels.
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