Dubai gold prices slide, with 24K at Dh505.50 and 14K falling below Dh300 for the first time in months.
Dubai: Gold prices fell sharply over the weekend as continued tensions surrounding the Strait of Hormuz kept energy costs elevated, adding to inflation concerns and expectations that the US Federal Reserve could face renewed pressure to raise interest rates.
In the UAE, gold opened significantly lower on Monday morning. The price of 24-karat gold stood at Dh505.50 per gram, down Dh11 from its previous close of Dh516.50. Meanwhile, 22-karat gold was trading at Dh468 per gram, while 14-karat gold fell to Dh300 per gram.
Oil prices and Fed expectations weigh on gold
In international markets, bullion dropped around 1.8%, slipping below the $4,200 level and extending losses after falling more than 2% last week.
Oil prices, meanwhile, moved higher after Tehran said it would maintain its conditions for reopening the Strait of Hormuz, a day after US President Donald Trump rejected Iran’s seven-day proposal.
Trump told Axios that he expects negotiations to resume this week. With the US-Iran conflict approaching its eighth month, Brent crude has risen by more than 70% so far in 2026.
Federal Reserve officials unanimously supported a quarter-percentage-point increase in the benchmark interest rate earlier this month, with several policymakers subsequently indicating that additional hikes may be necessary. Markets are now pricing in around a 65% probability of another rate increase in October.
Are bonds becoming more attractive than gold?
Justin Lin, an analyst at Global X ETFs, told Bloomberg that gold prices remain heavily influenced by movements in oil markets and changing expectations over a potential resolution to the Middle East conflict.
He said many traditional gold buyers are likely to stay on the sidelines until there is greater clarity over how the Iran conflict could end. At the same time, selling pressure is being influenced by rising real yields, which can make interest-bearing assets such as bonds relatively more attractive compared with non-yielding gold.
Gold has traded within a relatively tight range of $4,230 to $4,510 during September as investors continue to reassess the outlook for US Federal Reserve policy. Prices remain well below the record high of nearly $5,600 reached in January.
Despite weaker bullion prices, activity in the gold mining sector remains active. South Africa’s Gold Fields Ltd. recently approached Northern Star Resources Ltd., Australia’s largest gold producer, with a potential deal, but the proposal was rejected on Monday.
At 8.30am Dubai time, spot gold was down 1.88% at $4,197.54 an ounce. Silver fell 3.41% to $61.98, extending its 3% decline from the previous week, while platinum and palladium each dropped more than 2%.
Meanwhile, the Bloomberg Dollar Spot Index, which tracks the performance of the US dollar, gained 0.1% after rising around 2% so far this month.
