Dubai gold prices dropped below Dh500 per gram on Thursday, giving shoppers another opportunity to buy gold at lower rates after a sharp decline during the first half of June.
The latest figures showed that 24-karat gold traded at Dh491.75 per gram, down from Dh492.50 a day earlier. Meanwhile, 22-karat gold fell to Dh455.25 per gram from Dh456.
The decline marks a significant reversal from the beginning of the month. Dubai gold prices opened June with 24-karat gold at Dh539.75 per gram and 22-karat gold at Dh500. Prices briefly climbed above those levels before starting a steady downward trend.
As a result, 24-karat gold has lost nearly Dh48 per gram since the start of June. Therefore, many residents are closely watching the market for jewelry purchases, gifts, and wedding-related shopping.
Analysts said global gold prices remain under pressure despite ongoing geopolitical tensions in the Middle East. Traditionally, investors buy gold during periods of uncertainty. However, markets are currently focusing more on inflation concerns and interest rate expectations.
Furthermore, recent US economic data strengthened expectations that interest rates may remain elevated for a longer period. Higher interest rates generally reduce the appeal of gold because the precious metal does not generate interest income.
In addition, stronger inflation data in the United States increased concerns among investors. Rising energy costs have contributed to higher inflation, which has encouraged expectations of tighter monetary policy.
Market experts noted that tensions surrounding the Strait of Hormuz have also influenced investor sentiment. While geopolitical risks usually support gold prices, the current situation has increased fears about energy inflation instead.
Consequently, investors have shifted attention toward the impact of higher oil prices on inflation and interest rates. This change in market focus has limited demand for gold as a safe-haven asset.
Despite the recent decline, analysts believe global economic conditions, central bank policies, and geopolitical developments will continue driving gold prices in the coming weeks.
