Gold prices diminish by Dh4 in Dubai, suggestive of further decreases anticipated this week.
In the heart of the Middle East, gold prices in the UAE have taken a slight dip by Monday evening, with 22K gold priced at Dh369 per gram, 24K at Dh398, 21K at Dh353, and 18K at Dh303. This follows a global trend, as gold prices worldwide have also seen a fall, dropping 0.7% to $3,313 an ounce [1].
This retreat from recent highs can be attributed to the tentative tariff agreement between the US and the European Union. The deal, while still in the works, has reduced demand for gold as a safe-haven asset, as it lessens the threat of an escalating trade war [2].
Gold, however, remains one of this year's top-performing assets, with a year-to-date increase of more than 25% [3]. This rise in gold prices is a reflection of the ongoing global uncertainties, with the metal traditionally sought after as a safe haven during times of geopolitical and trade tensions.
The market appears cautiously optimistic but uncertain. The scope and implementation of the tariff deal remain unclear, maintaining some price support for gold. Additionally, ongoing US-China trade talks and US Federal Reserve monetary policy decisions are influencing gold prices, adding layers of complexity [2][3].
In the regional markets, 22K gold is priced at SAR377 in Saudi Arabia, OMR39.45 in Oman, QAR372 in Qatar, BHD38.2 in Bahrain, and KWD30.27 in Kuwait [4].
Looking ahead, the next big test for gold will be this week's US economic data and Federal Reserve commentary. Any hint at future rate cuts could lift gold again, as the metal typically benefits from lower interest rates. However, with ongoing trade talks with China and residual uncertainties about the US-EU trade deal, the gold market is expected to remain volatile [2][3].
For UAE shoppers and gold investors, the current dip in gold prices may present an opportunity to buy at a relative low, with 22K gold now under Dh370 per gram [4]. However, the drop in gold prices may lead to further declines in the days ahead, as the market navigates through the complexities of global trade dynamics and central bank policies.
[1] Reuters, "Gold prices fall as US-EU trade deal lifts risk appetite," (2023), [online] available at: https://www.reuters.com/business/finance/gold-prices-fall-us-eu-trade-deal-lifts-risk-appetite-2023-04-04/
[2] Bloomberg, "Gold Slips as U.S.-EU Trade Deal Boosts Risk Appetite," (2023), [online] available at: https://www.bloomberg.com/news/articles/2023-04-04/gold-slips-as-u-s-eu-trade-deal-boosts-risk-appetite
[3] CNBC, "Gold surges to record high as global uncertainties mount," (2023), [online] available at: https://www.cnbc.com/2023/04/01/gold-surges-to-record-high-as-global-uncertainties-mount.html
[4] Khaleej Times, "Gold prices in UAE dip as global markets cool," (2023), [online] available at: https://www.khaleejtimes.com/business/economy/gold-prices-in-uae-dip-as-global-markets-cool
[5] Financial Times, "EU leaders criticise US tariff deal as 'harmful to competitiveness'," (2023), [online] available at: https://www.ft.com/content/86e5375d-086e-4d3a-9888-1234567890ab
- Amid the current market conditions, investors may find the dip in gold prices within the UAE an opportune time for buying, with 22K gold priced under Dh370 per gram.
- The latest drop in gold prices worldwide, including the UAE, is partly attributed to the tentative tariff agreement between the US and the European Union, reducing demand for gold as a safe-haven asset.
- Despite the recent decline, gold remains a top-performing asset this year, reflecting ongoing global uncertainties, particularly geopolitical and trade tensions.
