Dubai gold prices remain steady as treasury yields grab attention

Dubai: Gold prices maintained a stable trend worldwide as lower oil prices alleviated inflation concerns, while high treasury yields kept market participants cautious. In the UAE, 24-karat gold prices lingered near the Dh500 mark, trading at Dh501.25 on Wednesday. 22-karat gold was priced at Dh464.25, and 18-karat at Dh381.50. For those purchasing jewelry for everyday use, 14-karat gold dipped below Dh300 to Dh297.50.

Bullion prices have been oscillating around $4,180 per ounce, marking a 1.6% increase from the previous session.

Crude oil prices persisted in their decline as indications surfaced that Middle East supply had rebounded to near pre-war levels. This recovery was partly driven by Saudi Arabia increasing shipments through a crucial pipeline. Consequently, fuel prices have softened despite the ongoing deadlock over the Strait of Hormuz, which had previously fueled fuel price hikes.

Nonetheless, Brent crude has surged approximately 70% this year due to the prolonged conflict. External pressures continue to affect gold prices. However, it is not solely oil prices that are putting pressure on gold. The yield on the longest-dated US Treasury bond surged for the sixth consecutive day on Tuesday, reaching its highest level since 2002.

Traders are apprehensive that persistently high energy costs could compel additional rate hikes this year. Rising yields typically harm bullion, as it does not yield interest. Fed officials have cautioned that tighter monetary policy remains necessary even after they increased interest rates mid-month for the first time since 2023.

The focus now shifts to US personal consumption expenditures data released later on Wednesday, serving as the Federal Reserve's preferred inflation gauge. Additionally, Friday's non-farm payrolls report is expected to provide further insights into the Fed's rate outlook. Gold is anticipated to experience a monthly decline of nearly 5% and has lost 10.76% over the past six months.

Currently, spot gold stands at $4,170.40 an ounce in Dubai, up 0.54% from 9:30 a.m. local time. Silver increased by 0.1%, platinum, and palladium also saw slight gains. The Bloomberg Dollar Spot Index, a measure of the US currency, remained unchanged after rising 0.2% the previous session.