Gold Prices Rebound as Dollar Oil Prices Ease

News Desk 

DUBAI: Gold prices extended their rebound on Tuesday morning, supported by lower oil prices, a softer US dollar and easing concerns over inflation and interest rate hikes.

According to Dubai Jewellery Group data, 24-karat gold was trading at Dh523.25 per gram at the opening of the market. Prices for 22K, 21K, 18K and 14K gold stood at Dh484.75, Dh464.75, Dh398.25 and Dh310.75 per gram, respectively.

In international markets, spot gold was trading at $4,346.50 per ounce, up 0.01% as of 9:12am UAE time. Silver also gained 0.29% to reach $66.09 per ounce.

Vijay Valecha, financial analyst and CIO at Century Financial, said pressure on gold had eased as Treasury yields cooled following their recent rise. Gold typically faces downward pressure when bond yields increase.

He said falling oil prices for a third consecutive day, amid easing concerns over Middle East supply disruptions, were reinforcing a disinflationary environment that could support gold prices.

Valecha also noted that gold-backed exchange-traded funds had recorded inflows for eight consecutive days despite recent price weakness, indicating continued investor interest in the precious metal.

He said structural factors, including rising fiscal deficits, higher debt burdens and the possibility of a future easing cycle for the US dollar, could continue to support gold prices over the medium term.

On the technical front, Valecha said gold had reclaimed its short-term trendline and was testing resistance around $4,431-$4,434. A sustained move above that level could open the way toward $4,510 and then $4,573.

He identified support levels at $4,385 and $4,340, saying the short-term outlook would remain constructive as long as gold held above $4,340.

Meanwhile, silver was also tracking gold’s rebound and remained on course for a weekly gain, supported by easing inflation pressures and a weaker dollar.