Time to buy? Gold prices drop further in Dubai; 24K slips below Dh230 per gram

The Dubai Jewellery Group data shows 24K opening at Dh229.75 per gram on Wednesday as compared to last night’s close of Dh231.0 per gram

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Waheed Abbas

Published: Wed 27 Sep 2023, 9:39 AM

Last updated: Thu 12 Oct 2023, 3:27 PM

Gold prices in the UAE continued their downward trend, falling more than one dirham to a one-month low and trading below Dh230 per gram at the opening of the markets on Wednesday.

The Dubai Jewellery Group data showed 24K opening at Dh229.75 per gram on Wednesday as compared to last night’s close of Dh231.0 per gram. The 24K variant has lost Dh2.25 in value in the past 24 hours.

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Similarly, the 22K, 21K and 18K variants of the yellow metal opened lower at Dh212.75, Dh206.0 and Dh176.5 per gram, respectively, at 9 am local time.

Globally, spot gold was subdued at $1,896.54 per ounce by 9.15 am UAE time, after breaching a key $1,900 threshold and hitting its lowest level since August 23 on Tuesday.

Vijay Valecha, chief investment officer, Century Financial, said gold extended its decline due to the increase in long-term US Treasury yields and the strengthening US dollar.

“When examining the near-term technical outlook, gold appears to be trading without a clear directional trend,” said Valecha.

Meanwhile, China’s local gold price premium has surged to unprecedented levels, hitting $121 per ounce on September 14. This premium is typically higher than international prices due to China's heavy reliance on gold imports, making it a scarcer commodity due to import controls and limited domestic production. Limited gold imports in July and August coincided with increased wholesale demand, further boosting the Shanghai-London gold price premium. Short covering in the Shanghai-Comex futures spread could also be a contributing factor.

“However, the rising gold prices in China have been a deterrent to demand recovery in 2023 and may continue to dampen consumer interest, potentially leading to weaker-than-expected sales during the upcoming Golden Week,” he said.

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Waheed Abbas

Published: Wed 27 Sep 2023, 9:39 AM

Last updated: Thu 12 Oct 2023, 3:27 PM

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