April losses widen as elevated US yields and geopolitical tensions weigh on gold.
Dubai: Gold prices in Dubai fell on Tuesday morning, extending a downward trend that has persisted since the beginning of April.
At 8:24 a.m., 24K gold was trading at Dh557.25, down from Dh561 on Monday, while 22K gold slipped to Dh516 from Dh519.50. The decline continues a clear downward trend that has seen prices fall from Dh573 at the start of the month, with each session gradually easing lower and pushing bullion toward the mid-Dh550 range.
The pullback marks a notable cooling in momentum following the late-March highs, with buyers now waiting for clearer signals before re-entering the market.
Global markets turn cautious
International gold prices are also under pressure, falling below $1,620 an ounce after dropping more than 2% over the previous two sessions.
Market sentiment has turned cautious as geopolitical tensions intensify. US President Donald Trump has warned of potential strikes on Iranian infrastructure if no agreement is reached, heightening a conflict that has already disrupted energy flows and fueled inflation concerns.
The war has now entered its sixth week, adding uncertainty to global growth prospects and keeping investors on edge.
Interest rates remain a key drag
Pressure on gold is increasingly linked to expectations for US interest rates.
Treasury yields are hovering around 4.3%–4.4%, while the dollar remains firm. This combination reduces demand for gold, which does not generate yield, and limits any near-term upside potential.
Linh Tran, Market Analyst at XS.com, said the recent decline reflects growing hesitation across markets.
“The primary pressure on gold continues to come from elevated US Treasury yields, hovering around 4.3–4.4%, alongside the sustained strength of the US dollar,” Tran explained. “In addition, persistently high oil prices amid ongoing geopolitical tensions are reinforcing concerns over sticky inflation. This dynamic supports the ‘higher for longer’ narrative, leaving limited incentive for capital to rotate back into non-yielding assets such as gold.
Gold recorded its second consecutive session of decline, reflecting growing caution in the market as macro factors have yet to provide a clear directional catalyst.”
Economic data has offered little relief. The latest US ISM Services reading came in below expectations, yet markets showed a muted response.
“The market is shifting its focus toward upcoming key data releases, including GDP, PCE, and CPI,” Tran said.
Repositioning after a strong rally
Recent price action also suggests that investors are adjusting positions following gold’s earlier rally.
Profit-taking and deleveraging have accelerated ahead of key inflation data, which will play a crucial role in guiding the Federal Reserve’s next move.
“The primary pressure on gold at this stage continues to come from elevated US Treasury yields alongside the sustained strength of the US dollar,” Tran added.
Persistently high oil prices are also fueling inflation concerns, reinforcing expectations that borrowing costs could remain elevated for an extended period.
What buyers should watch now
Despite the ongoing slide, early signs indicate that some investors are stepping in at lower levels. Holdings in gold-backed exchange-traded funds increased slightly last week, suggesting selective dip-buying is beginning to emerge.
Tran believes the current movement is part of a broader adjustment phase.
“The current pullback is more likely a technical correction and repositioning phase rather than a structural trend reversal,” Tran said.
Attention now turns to upcoming US inflation data. A softer reading could revive expectations of rate cuts and provide support for gold prices, while persistent inflation and high yields are likely to keep the metal under pressure.
