Rising regional conflict and higher oil prices spur renewed investor demand for gold.
Dubai: Gold prices in Dubai hit a one-month high on Tuesday morning. The 24-karat rate rose to Dh646.50 per gram at 9:24 a.m., up from Dh641 the previous day, while 22-karat gold increased to Dh598.75, up from Dh593.50.
“The rise continues a steady four-week upward trend in Dubai’s bullion market, placing retail buyers back in a high-price environment amid global uncertainty and soaring crude oil prices.”
One month, one clear trend
Gold prices in Dubai have shown a clear upward trajectory over the past month. Early February started on a softer note, with 24-karat gold trading at Dh564.25 on February 2. Prices fluctuated through mid-month, dipping below Dh600 on several occasions before regaining momentum. By February 17, the rate had risen to Dh590.75, reaching Dh611.50 by February 20. Gains accelerated in the final days of the month, touching Dh636 on March 1 and holding at Dh641 on March 2, before spiking to Dh646.50 on Tuesday.
The 22-karat category followed a similar path, climbing from Dh522.50 on February 2 to Dh598.75 on March 3, marking a sharp increase in retail gold prices within a single month.
Global bullion rallies amid heightened geopolitical risks
Global gold prices have extended gains for a fifth consecutive session, climbing above $5,300 an ounce and at one point nearing $5,420 in Asian trading. The surge follows escalating hostilities between the United States and Iran, renewed regional strikes, and attacks targeting oil and gas infrastructure, including threats to shipping in the Strait of Hormuz.
Rania Gule, Senior Market Analyst at XS.com MENA, said the rally reflects a broader shift in investor positioning:
“The gold market is experiencing an exceptional surge, with prices breaking through $5,300 per ounce and approaching $5,375 in early Asian trading, following a previous jump to around $5,420. These moves are not merely speculative but represent a comprehensive repricing of geopolitical risks amid escalating US-Iran tensions, with potential for broader conflict in the Middle East. When gold hits historical highs in a short period, it signals that precautionary demand outweighs considerations such as yields and opportunity costs.”
Another key driver is the sharp rise in oil prices, which has reignited inflation concerns. Gule explained that higher oil prices due to geopolitical tensions increase demand for gold as a safe haven while simultaneously creating inflationary pressures that could influence Federal Reserve policy. Historically, gold benefits from low interest rates, but the current rally shows that geopolitical risk is temporarily outweighing monetary considerations, with investors prioritizing protection against systemic risks despite the cost of holding a non-yielding asset.
Energy markets fuel inflation concerns, supporting gold demand
Energy markets have reacted sharply to regional tensions, reviving inflation worries in the United States. Rising oil prices have pushed Treasury yields higher and complicated expectations for Federal Reserve rate cuts, with traders now anticipating easing later than previously expected.
Rania Gule noted that the combination of geopolitical risk and inflation anxiety is reinforcing gold’s appeal, even in a higher-rate environment.
Volatility expected, bias remains higher
Gold holding above the $5,300 level signals strong buying interest and the establishment of a new support zone, suggesting the market remains biased to the upside amid ongoing uncertainty.
Gold outlook: Volatility with an upward bias
“If inflows into gold funds and institutional hedges continue, we may see a retest of $5,450–$5,475 in the near term. However, short-term optimism should be tempered; fear-driven markets can reverse sharply if signs of sudden easing emerge. I expect high volatility in the coming sessions, with a general upward bias as long as political conditions remain largely unchanged,” said Rania Gule.
Retail buyers in Dubai are now navigating a market that has surged nearly 25% this year, driven by persistent geopolitical tensions, inflation concerns, and broader shifts away from bonds and currencies. Jewellery shoppers may postpone purchases in anticipation of pullbacks, while investors view dips as opportunities to increase holdings.
“Crucially, gold is no longer moving solely as a traditional hedge but as a reflection of the global financial system’s health. In an environment where geopolitical risks intersect with inflationary pressures and complex monetary policies, gold becomes a key tool for reallocating risk within investment portfolios,” Gule added.
She noted that any rapid de-escalation could reduce the risk premium and trigger profit-taking below $5,200 an ounce, though fresh buyers are likely to step in amid lingering uncertainty
In this uncertain environment, gold remains, in my view, the clearest indicator of global market anxiety.
