Dubai: Gold in Dubai edged higher Tuesday, building on a modest rebound after March’s steep correction.
At 8:40 a.m., 24K gold was trading at Dh549, up from Dh541.75 the previous day, while 22K gold rose to Dh508.50 from Dh501.50. The gains reflect a steady pickup in buying interest after prices appeared to stabilize in the final week of the month.
Gradual climb
Gold prices began the month at elevated levels, with 24K gold trading above Dh640, before easing through mid-March. Rates fell sharply from over Dh600 to the mid-Dh500 range within days.
Selling pressure intensified in the latter half of the month, pushing prices down to around Dh528 by March 24, before briefly stabilizing near Dh529–Dh530. A short-lived rebound toward Dh545 followed, but prices dipped again to the low-Dh540 range at the start of this week.
The recent rise to Dh549 marks a recovery from the earlier lows, though prices remain well below the early-month peak.
Global risks support bullion
Downside risks to global growth, driven by elevated oil prices, are becoming more pronounced. This could encourage defensive positioning, providing support for gold despite the prevailing interest rate environment, says Tony Sage, CEO of Critical Metals.
Global cues drive sentiment
International developments are also influencing local sentiment. Gold extended gains globally after indications that the US may seek an end to the Iran conflict without reopening the Strait of Hormuz, easing immediate risk concerns while uncertainty remains.
Additionally, comments from the Federal Reserve suggesting a pause in rate decisions have reduced pressure on bullion, which typically underperforms in a high-interest-rate environment.
Tony Sage, CEO of Critical Metals, said the recent rebound reflects renewed investor positioning following the correction.
“Gold prices extended their rebound at the start of the week, stabilizing after a recent corrective phase. The persistence of geopolitical risks in the Middle East could underpin safe-haven demand, particularly after the metal’s decline earlier this month, fueling dip-buying.”
He added that rising oil prices and concerns over global growth could further support defensive demand for bullion.
Downside risks to global growth from elevated oil prices are becoming more pronounced, which could revive defensive positioning and support bullion despite the rate environment.
Short-term pressure still in play
The recovery remains fragile, with central bank activity and broader financial conditions continuing to influence sentiment.
“At the same time, gold could remain vulnerable in the short term amid the risk of further central-bank selling—after Turkey’s central bank offloaded a significant amount—and potential increases in Treasury yields and the US dollar. ETF flows have remained negative overall, which could weigh on the market if the trend continues,” Sage added.
What to watch next
Markets are now focusing on geopolitical developments, inflation trends, and US economic data for clues on the next direction of gold prices.
“Looking ahead, gold’s trajectory is likely to be shaped by developments in the Middle East, inflation expectations, and the evolution of monetary policy, as well as the potential impact of elevated oil prices on the global economy. Upcoming US economic data could also influence sentiment and drive gold prices by affecting expectations around monetary policy.”
