Dubai: Dubai gold prices opened the week softer, tracking a pullback in global bullion markets as geopolitical signals turned mixed and investors reassessed risk. (Check latest UAE gold prices here, alongside prices in Saudi Arabia, Oman, Qatar, Bahrain, Kuwait, and India.)
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At 8.15am, 24K gold was priced at Dh560.50 per gram, down from Dh563.50 on Sunday. The 22K variant slipped to Dh519 from Dh521.75, reflecting a modest but noticeable easing for retail buyers.
The move comes after a volatile stretch that had pushed prices sharply higher through March, before momentum began to fade.
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Ceasefire talks shift sentiment
Global gold prices found some support after early losses, trading near $4,630 an ounce after falling as much as 1.6% earlier in the session. Markets reacted to reports of a diplomatic push involving the US, Iran and regional intermediaries exploring a potential 45-day ceasefire.
That shift in tone has begun to ease immediate safe-haven demand, even though the broader conflict remains unresolved and headline risk continues to drive short-term swings.
Conflicting signals from Washington continue to shape market direction. President Donald Trump renewed warnings of escalation over the weekend, including threats linked to the Strait of Hormuz, while also signalling further announcements with a set timeline that has kept traders cautious.
War impact now feeding into inflation fears
Gold’s trajectory in recent weeks has been shaped less by fear-driven buying and more by inflation concerns linked to energy markets.
Prices have fallen roughly 12% since the conflict began in late February, with rising fuel costs feeding into expectations that central banks will stay cautious on rate cuts. Higher oil prices have already filtered through to US gasoline, adding pressure on consumer inflation expectations.
That dynamic matters for bullion. Gold tends to perform better in a low-rate environment, and any delay in easing reduces its appeal relative to yield-bearing assets.
Strong US data complicates outlook
Fresh economic data from the US has added another layer to the outlook. Nonfarm payrolls in March rose at the fastest pace since late 2024, reinforcing the view that the Federal Reserve will prioritise inflation control over rate reductions.
Economists are now bracing for a sharp rise in US inflation data this week, with forecasts pointing to a 1% monthly increase in the consumer price index. That would mark the steepest jump since 2022 and reflect the direct impact of higher energy prices.
Investors are also adjusting positions after recent gains. Bullion had risen more than 4% last week before reversing course, with Thursday’s drop snapping a four-day rally.
What this means for UAE buyers
Short-term price dips may offer limited relief for UAE shoppers, particularly ahead of seasonal buying periods, but volatility remains high and largely driven by global developments.
Price direction now hinges on three moving pieces, how ceasefire talks evolve, whether oil prices continue to climb, and how central banks respond to mounting inflation pressure.
- With inputs from Bloomberg.
