Gold price drop in Dubai amid fresh hostilities in Middle East
Gold prices fell on Wednesday morning, with 22K slipping below Dh500 per gram again on higher oil prices and fresh hostilities in the Middle East.
The 24K gold price fell to Dh538.5 per gram at the market open on Wednesday, down from Dh542.5 per gram at the close of the market on Tuesday, losing Dh4 per gram.
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Among the other variants, 22K, 21K, 18K, and 14K slipped to Dh498.5, Dh478.0, Dh409.75 and Dh319.5 per gram, respectively.
Spot gold was trading below $4,500 per ounce at $4,468, losing half a per cent in early trade. Silver slipped 0.7 per cent to $74.77 an ounce.
Gold fell for a third consecutive month in May, albeit at a much reduced pace, as the Middle East conflict shifted investor attention towards its broader implications for global energy markets, inflation, the dollar and interest rates.
Gold tends to perform best during financial or economic shocks that weaken the dollar and lower real yields. The current energy-driven inflation shock has had the opposite effect, supporting yields and the dollar while reducing expectations for rate cuts, thereby creating a headwind for gold.
“Since hitting a record peak near $5,600 in late January, gold has endured a challenging period, with prices falling for a third consecutive month in May, albeit by less than 2 per cent, as the Middle East conflict shifted investor attention towards its broader implications for global energy markets, inflation, the dollar and interest rates,” said Ole Hansen, Head of Commodity Strategy, Saxo Bank.
