Gold prices inched higher in Dubai and globally on Wednesday morning after a sell-off in the previous session.
The 24K gold price was trading at Dh487.75 per gram, up from Dh485 per gram at the close of the market on Tuesday.
Similarly, 22K, 21K, 18K and 14K gold were trading at Dh451.5, Dh433, Dh371.25 and Dh289.5 per gram, respectively.
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Spot gold was up 0.9 per cent at $4,058.48 per ounce. Silver was trading at $52.83, up more than three per cent.
Gold lost nearly three per cent on Tuesday.
Dilin Wu, research strategist at Pepperstone, said the precious metal is facing a tougher road in the near term.
“The market has largely priced in a 25bp interest rate hike by the US Federal Reserve in December, but hotter-than-expected US inflation has brought the possibility of a 50bp move back into play. A stronger dollar and rising Treasury yields are making it harder for gold to sustain a recovery,” she added.
The bigger question for gold bulls is what other bad news has not been priced in yet.
“The tricky part is that gold could come under pressure whether risk assets rise or fall. If concerns over AI financing and profitability, or a disappointing Anthropic IPO, trigger another equity sell-off, investors may be forced to sell gold to raise cash and cover losses elsewhere. Ironically, if equities perform too well, gold could also lose some of its appeal as investors favour riskier assets,” Dilin added.
A further escalation in geopolitical tensions could also pose a risk, she said, adding that if oil prices surge again, renewed inflation concerns and expectations of further Fed tightening could support the dollar while weighing on non-yielding gold.
“I’d watch $4,000 closely. A decisive break could open the door to $3,960, while gold would need to reclaim $4,100–$4,110 to rebuild bullish momentum. I’m still constructive on gold over the medium term, supported by central bank demand and persistent fiscal uncertainty. But for now, the bigger risk is that gold struggles to find a clear catalyst for a sustained recovery, even when uncertainty rises,” the Pepperstone research strategist added.
Source: Khaleej Times