Retail gold prices ease despite rising Strait tensions and a firm interest rate outlook.
Dubai: Gold prices in Dubai edged lower again on Tuesday morning, signalling that global monetary factors — rather than geopolitical tensions linked to the ongoing US-Israel conflict involving Iran — continue to drive bullion markets.
Retail prices eased despite rising tensions around the Strait of Hormuz, as traders focused more on the stronger US dollar and firm interest rate expectations. A stronger dollar typically makes gold more expensive for overseas buyers and reduces its appeal as a non-yielding asset. Reuters reported spot gold falling 0.7% to $4,784.37 an ounce as the dollar edged higher and investors watched for clarity on possible US-Iran peace talks.
Despite heightened uncertainty in the region, local gold rates softened, extending Monday’s decline and reinforcing a broader trend in which interest rate expectations and currency movements are having a stronger impact than safe-haven demand.
In Dubai, 24-carat gold was priced at Dh577.00 per gram, down from Dh580.50 yesterday, while 22-carat gold slipped to Dh534.25 from Dh537.50.
This continued decline follows Monday’s drop, offering some relief to buyers after last week’s elevated prices, although the pullback remains gradual rather than sharp.
The trend follows Monday’s market direction, when prices fell more sharply as global bullion slipped below the $4,800 mark.
Although geopolitical tensions — especially surrounding Iran and key oil shipping routes — remain high, markets are clearly reacting more to macroeconomic signals, particularly the strength of the US dollar and the outlook for interest rates.
In Saudi Arabia, gold prices remained unchanged, suggesting a pause in momentum. The 24-carat rate held steady at 596.00, while 22-carat gold stayed at 544.00. This flat movement indicates that the earlier global pullback may already have been priced in, with no strong new catalyst to move prices further in either direction.
In India, gold prices also remained stable. The 24-carat rate stood at ₹155,290 per 10 grams, while 22-carat gold was priced at ₹142,350 per 10 grams — both unchanged from the previous session. The lack of movement reflects a similar wait-and-watch approach among buyers, especially as global signals remain mixed and currency movements continue to play a bigger role.
Internationally, gold prices continued to soften, with spot gold down about 0.5 per cent to $4,795 per ounce, extending losses from the previous session. A slightly stronger US dollar has made gold more expensive for holders of other currencies, adding further downward pressure.
Markets are closely watching whether the US and Iran will move ahead with potential peace talks, as this could influence oil prices and broader inflation expectations. Analysts say that while geopolitical risks still provide support, gold’s recent direction has been driven more by changes in the dollar and bond yields.
After a three-week rally driven mainly by softer inflation data and falling yields, gold now appears to be entering a consolidation phase. Any rebound in the US dollar or Treasury yields could put further pressure on prices, suggesting that near-term movements may remain volatile but within a limited range unless a clear macroeconomic trigger emerges.
