Gold prices in Dubai and on the global market showed growth on Wednesday morning after a decline observed the previous day. The price of 24-karat gold was 487.75 dirhams per gram, which is higher than the 485 dirhams per gram recorded at the close of the market on Tuesday.
Similarly, prices for 22, 21, 18, and 14-karat gold traded at levels of 451.5, 433, 371.25, and 289.5 dirhams per gram, respectively. In the spot market, gold rose by 0.9 percent, reaching $4058.48 per ounce. Silver traded at $52.83 per ounce, showing a rise of more than three percent.
On Tuesday, gold lost almost three percent of its value. Dilin U, a strategic analyst at Pepperstone, noted that the precious metal faces a more complex period in the near term.
She explained that the market largely accounted for the Federal Reserve's 25 basis point interest rate hike in December, but the higher-than-expected inflation level in the US has once again raised the probability of a 50 basis point increase. A stronger dollar and rising Treasury yields are hindering the recovery of gold prices.
A more important question for proponents of rising gold prices is what other negative factors the market has not yet accounted for. Dilin added that gold could come under pressure both with rising and falling risk assets. If concerns about AI financing and profitability or a disappointing Anthropic IPO trigger another stock sell-off, investors may need to sell gold to raise cash and cover losses in other areas. Ironically, if stocks perform too well, gold may also lose its appeal as investors will prefer riskier assets.
The strategist also warned that further escalation of geopolitical tensions could pose a risk. She suggested that if oil prices sharply rise again, inflation concerns and expectations of further tightening of Fed policy could resurface, which might support the dollar while putting pressure on non-yielding gold.
Dilin U advised closely monitoring the $4000 mark. A decisive breakthrough could pave the way to the $3960 level, while regaining the bullish momentum would require gold to return to the $4100–$4110 level. Despite this, she maintains a constructive view on gold in the medium term, supported by central bank demand and persistent fiscal uncertainty. However, the main risk at present is that gold may fail to find a clear catalyst for a sustained recovery, even amid rising uncertainty.
