Gold prices in the UAE continued their descent, dropping over one dirham to reach a one-month low and trading below Dh230 per gram at the market’s opening on Wednesday.
Data from the Dubai Jewlery Group revealed that 24K gold began the day at Dh229.75 per gram, down from the previous night’s close of Dh231.0 per gram. This variant of gold lost Dh2.25 in value within 24 hours.
Similarly, the 22K, 21K, and 18K variations of gold started lower at Dh212.75, Dh206.0, and Dh176.5 per gram, respectively, at 9 am local time.
On the global stage, spot gold remained subdued at $1,896.54 per ounce by 9:15 am UAE time, after breaching the crucial $1,900 threshold and reaching its lowest point since August 23 on the previous day.
Century Financial’s Chief Investment Officer, Vijay Valecha, explained that the decline in gold prices was due to the rise in long-term US Treasury yields and a stronger US dollar. He also mentioned that the near-term technical outlook for gold appeared uncertain.
Additionally, the local gold price premium in China reached unprecedented levels, hitting $121 per ounce on September 14. This premium is usually higher than international prices due to China’s heavy reliance on gold imports, resulting from import controls and limited domestic production.
The limited gold imports in July and August coincided with increased wholesale demand, further boosting the Shanghai-London gold price premium. The potential impact of these rising gold prices in China on consumer demand and sales during the upcoming Golden Week was also discussed.