Dubai Gold Prices Rise Sharply, Weekend Buyers Now Paying More

JAKARTA - Dubai gold prices have jumped again. Buyers who postponed transactions at the weekend now have to pay more, especially for large jewelry and gold bars.

Launching a report by Gulf News, Monday, June 15, the price of 24 karat gold in Dubai rose to Dh521.75 per gram on Monday at 13.00. Dh is dirham, the currency of the United Arab Emirates. A day earlier, the price was still Dh508.50 per gram. This means an increase of Dh13.25 in a day.

22 karat gold also rose. The price became Dh483 per gram from the previous Dh470.75. The increase was more than Dh12 in a day.

This increase occurred after the price of Dubai gold fell last week. 24 karat gold touched Dh492.50 per gram on June 10, the lowest level this month.

Early June, Dubai gold prices were still high. On June 1, 24 karat gold was at Dh539.75 per gram. A day later it rose to Dh542.50. Prices then remained expensive on June 3 and 4, at Dh536 and Dh538.50 respectively.

After that, prices began to fall. On June 5, 24 karat gold weakened to Dh522.50. Then it fell again to Dh514.25 on June 9 before falling to Dh492.50 on June 10.

But the decline was short-lived. Prices rose again to Dh506.50 on June 11, then remained at Dh508.50 for the next three days. The rise on Monday brought prices back to levels around June 7 and 8.

A similar pattern occurred in 22-karat gold. The price opened at Dh500 per gram in early June, rising to Dh502.25 on June 2, then falling to Dh456 on June 10. On Monday, the price recovered to Dh483 per gram.

Gulf News reported that the rise in gold occurred after the United States and Iran announced a temporary agreement to end hostilities and reopen the Strait of Hormuz.

The Strait of Hormuz is an important route for world energy trade. If the area is disrupted, the global oil market and inflation are usually affected.

After the news of the US-Iran deal, gold bars rose by 3 percent to above US$4,345 per ounce. Silver also strengthened by 4.1 percent.

US President Donald Trump said the Strait of Hormuz would be reopened and the naval blockade against Iran would be ended. The deal is said to be signed on Friday.

Oil prices fell after the announcement. The decline in oil prices also eased inflationary concerns. This condition gives room for gold to rise after being depressed.

Gold prices during the conflict have been unusual. Since the conflict began in late February, gold has moved in the opposite direction to crude oil.

When oil prices are high, markets are worried that inflation will rise. If inflation rises, the central bank can hold high interest rates for longer. This condition usually reduces the attractiveness of gold because gold does not give interest.

Now, market attention is turning to this week's decisions by central banks, including the Federal Reserve. Markets are still calculating the chances of a rate hike by the end of the year.

Markets are still factoring in a possible hike by year-end. That leaves gold prices still sensitive to any signals on inflation, oil prices and the direction of rates ahead.