Dubai gold prices slipped below Dh490 as fresh strikes reignited inflation worries and interest-rate concerns.
Dubai: Gold prices dropped to their lowest level of the month on Monday morning, offering buyers a notable discount after rates stayed high for most of the previous week.
The 24-karat gold rate stood at Dh488.75 per gram at 8:39 am, down Dh7.75 from Sunday’s Dh496.50. The 1.6% drop pushed prices below Dh490 for the first time since early July.
The popular 22-karat gold category fell by Dh7.25 to Dh452.50 per gram on Monday, down from Dh459.75 in the previous session. The drop left 24-karat gold Dh14.25 below its July peak of Dh503, while 22-karat gold traded Dh13.50 below its monthly high of Dh466.
Prices erase early July gains
Gold prices have reversed the gains made at the start of July. The month opened with 24-karat gold at Dh489.75 per gram and 22-karat gold at Dh453.50 per gram, before both varieties climbed steadily in the first few days.
The 24-karat rate moved above Dh500 on July 3, reaching a monthly high of Dh503 on July 4 and July 5. Meanwhile, 22-karat gold rose to Dh466 per gram during the same period. However, prices later eased, with 24-karat gold slipping to Dh490 on July 8 before briefly rebounding to Dh497.25 the following day.
The recovery was short-lived, as gold rates fluctuated between Dh493.75 and Dh496.50 over the weekend. Monday’s decline pushed both 24-karat and 22-karat gold prices below their opening levels from July 1.
Weekend strikes weigh on precious metals
The decline in Dubai gold prices came amid a broader sell-off in precious metals after the US and Iran exchanged fresh strikes over the weekend. The developments pushed energy prices higher and revived concerns over inflation and the outlook for interest rates.
Spot gold fell as much as 1.6% to around $4,050 an ounce on Monday, following a 1.4% decline in the previous week. Silver also came under pressure, dropping as much as 3.1% during the session.
Market uncertainty increased further over the status of the Strait of Hormuz after the US disputed an Iranian statement that the key shipping route would remain closed “until further notice.”
US Central Command said American forces conducted a fourth round of strikes within a week after an attack on a container ship.
Interest-rate concerns resurface
Rising energy prices have renewed concerns that inflation may remain elevated, potentially limiting the US Federal Reserve’s ability to cut borrowing costs.
Minutes from the Fed’s June meeting revealed that some policymakers saw a potential case for raising interest rates, although the central bank ultimately decided to leave rates unchanged.
Higher interest rates generally put pressure on gold prices because the precious metal does not generate interest income. The yield on the interest-rate-sensitive two-year US Treasury note rose to its highest level since February 2025, while a stronger dollar made gold more expensive for buyers using other currencies.
Gold has declined more than 20% since the Iran conflict began in late February. Profit-taking brought an end to a three-year rally and briefly pushed prices below $4,000 an ounce for the first time since November.
