Gold prices in Dubai continue to rise as the price of 22K approaches 500 dirhams per gram

Gold prices in Dubai continued to rise on Wednesday morning, showing steady growth as the 24-karat sample approached the 500 dirham mark per gram.

At the start of trading on Wednesday, the 24K sample traded at 496 dirhams per gram, which is higher than the 492.25 dirhams recorded at the close of trading on Tuesday. Other varieties of the yellow metal—22K, 21K, 18K, and 14K—also showed an increase, reaching prices of 459.25, 440.25, 377.50, and 294.25 dirhams, respectively.

The price of gold on the spot market was $4134 per ounce, up 0.96%. Silver traded at $60.73, showing a rise of 1.18%.

Analysts note that sentiment towards gold is improving after several weeks of reduced activity. However, according to Vijay Valechi from Century Financial, the lack of a growth impulse prevents prices from making a significant leap upwards.

Valechi explained that leading banks have not changed their long-term optimistic forecasts, predicting that gold will recover to the $4500–$5000 per ounce level within the next few quarters. He added that it is unlikely the market will see a strong gold rally solely based on official demand.

Although central bank purchases of gold remain high, they are significantly lower than the record purchases of 2024. In Valechi's opinion, the real gold boom will likely occur when the market starts factoring in a softer stance from the Federal Reserve.

In the short term, attention will be focused on US job vacancies, and any relative weakness in the labor market will be a favorable factor for gold prices. On the other hand, a resilient labor market may 'prevent the Fed from easing policy, keeping the dollar strong and putting pressure on gold prices.'

He also noted that gold is in a consolidating pattern: buyers are trying to push prices back above the $4150 level, but prices continue not to reach new highs. Buyers successfully defended support at $4000 for several consecutive sessions and managed to raise prices back to $4060. A breakthrough above the $4100 level will be required to move the market higher, but failure to hold above $4000 will open the next support level at $3960.

Gold prices in Dubai continued to trade below the 500 dirham mark for the second consecutive week. On Monday morning, the price of the precious metal fell by 3.25 percent. Meanwhile, gold dropped almost 25 percent compared to January highs.

At the opening of markets on Monday, August 3, 24-karat gold traded at 489.75 dirhams per gram, which is below the level of 495.50 dirhams recorded on Friday. Other options, such as 22K, 21K, 18K, and 14K, cost 453.50, 435.00, 372.75, and 290.75 dirhams, respectively.

On the global market, the spot price of gold was 4064.34 dollars per ounce, showing a decrease of 0.31 percent. Silver also fell by 0.39 percent, trading at $58.35 per ounce.

Analysts believe that downward pressure on the yellow metal is likely to continue, as rising energy prices increase the probability that interest rates will remain high for an extended period. Over the past month, the precious metal has mainly fluctuated in the range of $3945 to $4160, failing to overcome the immediate resistance level of $4110, noted Vijay Valecha, Investment Director at Century Financial.

Valecha added that the daily 14-period RSI index has not crossed the 50 level since April, indicating a lack of positive momentum. He suggested that a break of the recent support level of $4022 in the current session could trigger a test of lows at $3945, and subsequently $3900. Conversely, only a decisive breakthrough and close above $4160 would signal strengthening bullish momentum.

Regarding silver, it has also remained within a narrow price range between $55.60 and $63.25 over the last month. According to Valecha, a break of the recent support level at $57.14 could lead to testing the lower boundary of the range at $55.60. Otherwise, a breakout and close above $63.25 would signal the formation of bullish momentum in this metal.

He also emphasized that due to rising rates, further pressure is expected on non-yielding metals, which reduces their attractiveness. Valecha explained that according to CME Fedwatch, markets still assess the probability of a rate hike by the end of the year at 84 percent.

According to data from the World Gold Council, demand for gold jewelry is likely to remain under pressure throughout the second half of this year. Meanwhile, geopolitical uncertainty, inflation concerns, and limited alternative investment options will continue to support demand for bullion and coins.

Decline in Jewelry Demand

The report on gold demand trends for the second quarter of 2026 noted that the volume of demand for jewelry reached its lowest quarterly figure since the pandemic—278 tonnes. This was due to high gold prices and general inflationary pressure, which restricted purchasing power. Nevertheless, spending on gold jewelry grew by 14% year-on-year, reaching $40 billion.

In Middle Eastern countries, jewelry demand remained weak in the second quarter due to high prices affecting affordability. Despite regional geopolitical turmoil, some growth was ensured by prices that were lower than previous peaks. Saudi Arabia showed itself to be one of the strongest participants in the region, demonstrating an 8% year-on-year decrease. In the UAE, the market recorded its fourteenth consecutive quarterly year-on-year decline, becoming one of the few markets where a drop in demand in US dollars was observed.

Market activity in the UAE was pressured by a decrease in tourist flow, as the country's economy is heavily dependent on tourists in the jewelry sector, and the conflict between the US and Iran negatively impacted activity. The market received some support due to lower prices and demand from Indian expatriates, which is likely to increase in the remainder of the year due to increased Indian import duties, giving the region a price advantage.

Strong Investment Demand

While jewelry demand remained weak, investment demand in the region proved more resilient. The World Gold Council noted that geopolitical instability continues to stimulate the purchase of safe-haven assets, and the correction in gold prices in the second half of the quarter contributed to the search for favorable deals. Investments in bullion and coins in the UAE increased by 30% year-on-year in the second quarter. This growth was driven by both demand for safe assets and higher Indian import duties, making the purchase of gold in the UAE relatively more attractive.

Across the Middle East, investment demand remained steady despite some slowdown compared to the exceptionally high figures at the beginning of the year. Globally, total gold demand, including over-the-counter (OTC) investments, remained unchanged year-on-year at 1269 tonnes in the second quarter. Thus, demand for the first half totaled 2522 tonnes, which is 2% more than the previous year. However, the value of this demand reached a record $380 billion due to rising prices.