Gold inched closer to Dh500 per gram again on Tuesday after easing in the past few weeks after a strong rally in global precious metal, driven by softer economic data cementing interest rate cuts by the US Federal Reserve.

The Dubai Jewellery Group data showed 24K trading at Dh499.25 per gram at the opening of the markets on Tuesday, rising Dh13.5 per gram in the past 24 hours. Similarly, 22K, 21K, and 18K were selling at Dh462.75, Dh443.25, and Dh379.75 per gram, respectively.

Spot gold was trading at $4,138.23 per ounce, up 0.59 per cent. The yellow metal jumped by over three per cent late on Monday. Over the past week, gold maintained a range-bound trend.

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Dilin Wu, research strategist at Pepperstone, said central bank purchases, particularly by the People's Bank of China (PBoC), continue to provide steady support for gold. However, shifting market expectations around a December Fed rate cut are capping gold's gains.

“ Looking at the daily chart, gold has been trading between $3,930 and $4,030 over the past week. While bulls retain a modest edge, gold is essentially consolidating in a balanced pattern - upside is limited, and downside capped,” he added.

“If bulls can sustain pressure and close above this level, $4,100 could serve as the next key resistance. A successful break above that could open the door to further gains. Conversely, a close below $4,000 could see $3,880–$3,900 provide a support buffer,” he added.

One key driver of recent gold support has been safe haven buying. Concerns over valuations have led to notable pullbacks in global tech stocks and AI-related equities, with the Nasdaq recording its largest weekly drop in seven months. Declining risk appetite has prompted some funds to shift into defensive assets like gold.

Central bank purchases have also provided structural support for gold. The People's Bank of China increased holdings for the 12th consecutive month, while central banks in Poland, Turkey, and other emerging markets steadily boosted reserves. These“de-dollarization” efforts complement safe-haven flows, forming a strong foundation for gold bulls.

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