Gold prices in Dubai plunge over Dh100 since start of US-Israel-Iran war
[Editor's Note: Follow Khaleej Times live blog amid US-Israel-Iran war for the latest regional developments.]Gold prices in Dubai continued its free fall to new lows on Saturday, as persistent regional tensions weighed on the market. The price of 24k gold stood at Dh541.50 when markets opened on Saturday. This marked a whooping Dh103 fall from March 2 — just days after the start of the US-Israel-Iran war — when the prices stood at Dh645.25 per gram. Similarly, the rates of 22K, 21K, 18K, and 14K slid down to Dh501.50, Dh480.75, Dh412.25 and Dh321.50 respectively on Saturday.According to experts, gold prices are currently navigating heightened uncertainty after caught between opposing forces that make it difficult to establish a clear short-term trend. Stay up to date with the latest news. Follow KT on WhatsApp Channels.“On the one hand, the macroeconomic backdrop in the United States has reinforced expectations of higher interest rates for longer,” said Antonio Di Giacomo, senior market analyst at XS.com. “On the other hand, the geopolitical environment continues to deteriorate, increasing demand for safe-haven assets.”'Fragile equilibrium'Recent US data shows that wholesale prices — a key measure of inflation — rose more than expected, jumping 0.7 per cent in a single month and hitting a one-year high of 3.4 per cent annually, mainly due to surging oil costs. In response, the US Federal Reserve signalled that it will be cautious about cutting interest rates anytime soon, which has strengthened the US dollar. According to Antonio, the Fed’s decision which came on Wednesday, is challenging news for gold because when the dollar is strong and interest rates remain high, investors find it less attractive to hold gold putting downward pressure on its price.He noted that despite these pressures, geopolitical factors remain a key support for the precious metal, as rising oil prices- driven by regional tensions- enhance gold’s appeal as a hedge against systemic risks and loss of purchasing power.“Over the past year, gold has posted gains of 50 to 60 per cent year-over-year, reflecting strong structural demand,” he said. “However, gold’s performance has not been linear. Despite geopolitical risks, its upside has been constrained by macroeconomic factors." "The combination of high interest rates, a strong dollar, and expectations of restrictive monetary policy continues to limit short-term upside potential, leading to consolidation phases around key psychological levels," he added.He concluded that the yellow metal is in a “fragile equilibrium, where geopolitical risks provide support, but dollar strength and elevated interest rates act as significant headwinds.”Gold prices continue to trend downward in Dubai in early tradeDubai gold prices trend downward as US-Iran talks start tomorrowDubai gold prices plummet by over Dh33 in a single day before Eid Al Fitr
[Editor's Note: Follow Khaleej Times live blog amid US-Israel-Iran war for the latest regional developments.]
Gold prices in Dubai continued its free fall to new lows on Saturday, as persistent regional tensions weighed on the market. The price of 24k gold stood at Dh541.50 when markets opened on Saturday.
This marked a whooping Dh103 fall from March 2 — just days after the start of the US-Israel-Iran war — when the prices stood at Dh645.25 per gram. Similarly, the rates of 22K, 21K, 18K, and 14K slid down to Dh501.50, Dh480.75, Dh412.25 and Dh321.50 respectively on Saturday.
According to experts, gold prices are currently navigating heightened uncertainty after caught between opposing forces that make it difficult to establish a clear short-term trend.
Stay up to date with the latest news. Follow KT on WhatsApp Channels.
“On the one hand, the macroeconomic backdrop in the United States has reinforced expectations of higher interest rates for longer,” said Antonio Di Giacomo, senior market analyst at XS.com. “On the other hand, the geopolitical environment continues to deteriorate, increasing demand for safe-haven assets.”
'Fragile equilibrium'
Recent US data shows that wholesale prices — a key measure of inflation — rose more than expected, jumping 0.7 per cent in a single month and hitting a one-year high of 3.4 per cent annually, mainly due to surging oil costs.
In response, the US Federal Reserve signalled that it will be cautious about cutting interest rates anytime soon, which has strengthened the US dollar. According to Antonio, the Fed’s decision which came on Wednesday, is challenging news for gold because when the dollar is strong and interest rates remain high, investors find it less attractive to hold gold putting downward pressure on its price.
He noted that despite these pressures, geopolitical factors remain a key support for the precious metal, as rising oil prices- driven by regional tensions- enhance gold’s appeal as a hedge against systemic risks and loss of purchasing power.
“Over the past year, gold has posted gains of 50 to 60 per cent year-over-year, reflecting strong structural demand,” he said. “However, gold’s performance has not been linear. Despite geopolitical risks, its upside has been constrained by macroeconomic factors."
"The combination of high interest rates, a strong dollar, and expectations of restrictive monetary policy continues to limit short-term upside potential, leading to consolidation phases around key psychological levels," he added.
He concluded that the yellow metal is in a “fragile equilibrium, where geopolitical risks provide support, but dollar strength and elevated interest rates act as significant headwinds.”
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