Dubai gold rises again amid tariff tensions, a weaker dollar, and increased safe-haven demand.
Dubai: Gold prices in Dubai rose on Wednesday morning, continuing a volatile month influenced by global trade tensions, geopolitical risks, and changing expectations for US interest rates, all of which are driving investor demand for safe-haven assets.
At 8:20 a.m., 24-karat gold in Dubai was priced at Dh623.25 per gram, up from Dh619.75 the previous day, while 22-karat gold rose to Dh577 from Dh573.75, marking a modest rebound after sharp fluctuations earlier in the week.
Global bullion markets showed a similar trend. Gold gained up to 1% during Asian trading, recovering from the previous session’s decline as investors reacted to uncertainty over US trade policy and rising geopolitical tensions in the Middle East. A weaker dollar and ongoing concerns about sovereign debt levels further supported demand for safe-haven assets.
Gold has stabilized above $5,000 per ounce, recouping more than half of the losses incurred during the sharp sell-off earlier this month.
February Shows Sharp Swings, But Upward Trend Persists
Dubai’s gold market experienced significant volatility throughout February, yet the overall trajectory remains upward. Prices started the month around Dh589 per gram for 24K gold, briefly dipping to the Dh564 range early on. A steady rally then pushed prices above Dh600 by mid-February, followed by sharp fluctuations between Dh615 and Dh626 over the past week, reflecting rapid shifts in global sentiment.
The month’s pattern underscores how closely local retail gold rates track global developments, particularly changes linked to trade tensions, currency fluctuations, and geopolitical events.
Trade Tensions and Fed Outlook Driving Demand
Investor sentiment continues to be heavily influenced by US trade policy, following the implementation of a broad 10% import levy this week and the potential for further tariff increases. Markets are also responding to the possibility of new national security investigations into certain imports, which could expand trade restrictions.
Meanwhile, expectations around Federal Reserve policy are shaping gold’s outlook. Minutes from the central bank’s January meeting indicated that officials remain cautious about cutting interest rates, a stance that supports gold by maintaining uncertainty around borrowing costs and economic growth.
Concerns over rising sovereign debt levels have also boosted what analysts call the “debasement trade,” with investors shifting away from currencies and bonds toward tangible assets like gold.
Rania Gule, Senior Market Analyst at XS.com MENA, noted that recent movements in silver highlight the broader forces affecting precious metals.
“Silver has experienced dramatic fluctuations in recent days, reflecting its dual nature—both investment and industrial—which makes it highly sensitive to political and monetary shocks simultaneously,” she said.
From a deeper perspective, Gule added that the recent pullback also reflects the market’s recognition that the 15% tariff—despite its political significance—will not, on its own, fundamentally change the structural supply-demand dynamics of the silver market.
She highlighted that trade escalation generally boosts demand for hedging assets, though silver behaves differently because of its strong industrial links. According to her analysis, the recent volatility reflects rapid repricing following a political shock rather than a fundamental shift in the long-term outlook.
“The tariff shock was the spark, but the real fuel lies in the structural supply deficit and accelerating industrial demand,” she said, noting that precious metals remain supported as long as global uncertainty persists.
Outlook Tied to Global Risks
Market direction in the coming weeks will largely depend on upcoming US economic data, including inflation and labor market indicators, which will influence interest rate expectations and currency movements.
Ongoing geopolitical tensions and trade uncertainties are expected to keep safe-haven demand high, suggesting that Dubai gold prices may remain volatile yet supported in the near term.
