Precious metal prices fell by Dh4.5 per gram in early trade in Dubai on Tuesday morning, as oil prices surged more than 2 per cent amid escalating US–Iran tensions.
Gold prices eased in Dubai on Tuesday morning, falling by Dh4.5 per gram in early trade as US–Iran tensions pushed oil prices higher and fuelled inflation concerns in the US economy.
According to Dubai Jewellery Group data, 24K gold was trading at Dh545.25 per gram, down from Dh549.75 per gram at Monday’s market close.
The precious metal gave up some of the gains it had made on Monday after US and Iranian officials said over the weekend that peace talks were progressing positively.
Other variants of the precious metal also declined in early trade on Tuesday, with 22K, 21K, 18K and 14K priced at Dh505.0, Dh484.25, Dh415.0 and Dh323.75 per gram respectively.
Spot gold was trading at $4,529 per ounce, down 0.9 per cent, while silver fell 2 per cent to Dh281.35 per ounce.
Brent crude rose 2.5 per cent to $98.54 a barrel on Tuesday morning after US forces carried out strikes in southern Iran on Monday, targeting boats suspected of laying mines as well as missile launch sites.
US and Iranian officials, meanwhile, downplayed expectations of an imminent breakthrough in peace talks, even as Iran’s chief negotiator and foreign minister met Qatar’s prime minister in Doha to discuss a potential agreement aimed at ending the three-month-long conflict.
Kelvin Wong, senior market analyst at Oanda, said that even if a peace deal between the US and Iran is progressing, damage to Middle East oil infrastructure could delay a swift recovery in global oil supply.
He added that markets are increasingly pricing in geopolitical risk, alongside expectations of a possible interest rate hike later this year.
