In recent years, gold prices in Dubai have been on the rise, but this upward trend might not persist due to “accumulated overbought conditions.”
Analysts suggest that there is a higher likelihood of prices decreasing rather than increasing.
Recently, the price of 24K gold in Dubai has hovered around Dh400 per gram, while 22K gold has fluctuated near Dh375 per gram.
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“The prolonged fluctuation in gold prices is nearing its end,” states Alex Kuptsikevich, chief market analyst at FxPro.
“This lengthy sideways movement over the past five months is likely to conclude soon, as August often heralds significant gold trends. The length of consolidation often correlates with the strength of the breakout. From a technical analysis standpoint, the downside potential is substantial—possibly down to $3,000 or even $2,200 per ounce. However, the upside potential is equally significant: $4,600 in a strongly bullish scenario, particularly if the US Federal Reserve adopts an extremely lenient stance,” Kuptsikevich explained.
On Monday, data from the Dubai Jewellery Group indicated 24K gold opened at Dh405.5 per gram, slightly down from Dh406.25 per gram at the weekend close.
Other gold variants, such as 22K, 21K, and 18K, also opened lower at Dh375.5, Dh360.25, and Dh308.75 per gram, respectively.
Globally, spot gold was trading at $3,364.76 per ounce, a dip of 0.23 percent.
“The US Federal Reserve is expected to ease monetary policy in September but may pause thereafter. This caution has renewed investor interest in the US dollar. Clouds are looming over gold due to US President Donald Trump’s initiatives to end the Ukraine conflict. The onset of hostilities and the freezing of Russia’s gold and foreign exchange reserves by the West marked the beginning of gold’s rally. Since February 2022, gold has surged 1.7 times, hitting a record high over $3,500 per ounce in April. This rally was fueled by de-dollarisation, central banks’ active bullion purchases, and heightened ETF demand,” he noted.
In the second quarter, he further explained, central bank activity in the precious metals market dropped significantly, and capital inflows into specialized exchange-traded funds slowed. “Without these supports, gold may struggle to regain an upward trend. However, favorable external conditions, such as the Fed’s monetary stimulus, lower Treasury yields, and a weaker US dollar in the medium term, could provide a boost,” he added.
