Dubai: Gold prices edged higher in Dubai on Tuesday morning, October 13, following a partial retreat in gains on Monday evening. The increase came as softer oil prices and a weaker US dollar supported bullion, while investors awaited fresh US inflation data for clues about the Federal Reserve’s interest-rate policy.
According to Dubai Jewellery Group data, 24K gold was priced at Dh505.75 per gram, while 22K traded at Dh468.25 and 21K at Dh449 per gram.
Internationally, spot gold rose 0.8 per cent to $4,199 an ounce.
Lower Oil Prices Support Gold
Naeem Aslam, chief investment officer at Zaye Capital Markets, said the recovery in gold reflected improving conditions for precious metals as declining energy prices and a relatively subdued US dollar eased pressure on bullion.
He said US President Donald Trump’s announcement of a proposed energy ceasefire between Russia and Ukraine, alongside an agreement to increase Russian diesel supplies, had contributed to falling oil prices.
Lower energy costs could help reduce inflationary pressure and expectations of restrictive monetary policy, potentially supporting gold, Aslam said.
However, he noted that further gains would depend on whether US Treasury yields and the dollar continued to moderate.
Geopolitical Uncertainty Keeps Safe-Haven Demand in Focus
Uncertainty surrounding geopolitical developments remains an important factor influencing gold prices, as investors often turn to the precious metal during periods of instability.
Aslam said that despite the announced energy ceasefire, continued attacks on energy infrastructure had raised doubts about its implementation and left the possibility of further disruptions to global energy supplies.
A credible reduction in regional tensions could temporarily weaken demand for safe-haven assets if investors shifted towards equities, he said.
Conversely, renewed disruptions to energy shipments or a deterioration in diplomatic negotiations could strengthen demand for gold.
The key factor, Aslam explained, is whether falling oil prices ease inflation expectations enough to offset any decline in geopolitical risk premiums.
US Inflation Data in Focus
Investors are watching upcoming US inflation figures for indications of the Federal Reserve’s next interest-rate decisions.
Changes in inflation expectations, Treasury yields and the US dollar could influence the direction of gold prices in the coming sessions.
While lower energy prices may provide support, ongoing geopolitical risks and uncertainty over monetary policy are likely to remain key drivers of the precious metal’s performance.
