Gold prices pull back from mid-month highs amid shifting global tensions and cautious investor sentiment.
Dubai: Gold prices in Dubai dipped Thursday morning, following a sudden shift in global sentiment that erased recent gains and prompted renewed selling.
At 8:32 a.m., 24K gold traded at Dh562.25, down from Dh573 the previous day, while 22K gold fell to Dh520.75 from Dh530.75, continuing a pullback that accelerated over the past 24 hours.
The drop came amid a turbulent global session, as gold pared earlier gains following comments from US President Donald Trump that provided little clarity on the future of the Middle East conflict.
March’s rally has given way to a sharp correction, following a volatile month for gold buyers in the UAE, as prices swung significantly between early-month highs and late-month pullbacks.
Gold began March at elevated levels, with 24K hovering above Dh620 and briefly approaching Dh630 in the first half of the month. Prices peaked around mid-March, crossing Dh600 and holding steady for several sessions.
A sharp reversal soon followed, with prices plunging into the Dh540 range within days, as global expectations around inflation, interest rates, and geopolitical risks shifted.
Short-lived rebounds toward the end of March pushed gold back into the mid-Dh560 range, but these gains proved fragile. The latest decline indicates that the earlier upward momentum has weakened, leaving prices well below their March highs.
Market sentiment shifted further after Trump’s remarks, in which he said the conflict was nearing completion but warned that the US would hit Iran “extremely hard” over the next two to three weeks, prompting investors to reposition.
Trump’s remarks rattled markets: equities dipped, the US dollar strengthened, and oil prices rose, reflecting persistent concerns over energy flows through the Strait of Hormuz.
This dynamic weighed on gold in the short term. Investors sold bullion to raise cash and cover losses elsewhere, dampening demand despite ongoing geopolitical tensions.
Recent gold movements suggest that liquidity pressures, rather than traditional safe-haven demand, are currently driving market behaviour, with portfolio rebalancing taking precedence over risk hedging.
Even amid heightened geopolitical risks, investors have often liquidated gold to cover losses in other parts of their portfolios, capping its upward potential.
This behaviour has fueled price volatility. March saw a near 12% decline—the sharpest monthly drop since 2008—underscoring how rapidly market sentiment can shift when inflation expectations and interest rate forecasts change.
