As the markets opened on Wednesday, gold prices in the UAE fell, hitting a one-month low and trading below Dh230 per gram. According to the Dubai Jewellery Group, 24K gold began trading at Dh229.75 per gram, down from Dh231.0 per gram at the closing the previous night. This indicates a decline in value of Dh2.25 in just one day. The 22K, 21K, and 18K varieties of gold opened at lower rates as well at 9 am local time, at Dh212.75, Dh206.0, and Dh176.5 per gram, respectively.
By 9:15 am UAE time, spot gold was trading at $1,896.54 per ounce globally. It has just dropped to its lowest point since August 23 when it fell beyond the important $1,900 threshold.
According to Century Financial’s chief investment officer, Vijay Valecha, the increase in long-term US Treasury yields and the strengthening of the US dollar are to blame for the decrease in gold prices. The short-term technical picture for gold is now unclear, he added.
Additionally, the local premium for gold in China has reached previously unheard-of heights, rising to $121 per ounce on September 14. Due to import restrictions and little domestic output, China’s strong reliance on the importation of gold has resulted in this large premium. The Shanghai-London gold price premium has increased as a result of the restricted gold imports during the months of July and August and rising wholesale demand. This pattern may also have been influenced by short covering in the Shanghai-Comex futures spread.
However, China’s rising gold prices have slowed the recovery of demand in 2023 and may do so in the future, which could result in weaker-than-expected sales during the forthcoming Golden Week.