Bullion Volatile Amid Middle East Conflict, Strong Dollar, and Changing Fed Expectations.
Dubai: Gold prices in Dubai climbed Friday morning following several days of volatile trading. However, the metal remains below the record levels seen earlier this month, as global market uncertainty continues to weigh on investor sentiment.
At 9:15 a.m. on Friday, the price of 24-karat gold in Dubai stood at Dh618 per gram, up from Dh611.50 on Thursday. The 22-karat gold price rose to Dh572.25, compared with Dh566.25 the previous day.
The modest rebound comes after a week of sharp swings in global bullion markets. Despite Friday’s gains, gold is still set for its first weekly decline in over a month.
Dubai Prices Reflect Global Volatility
Local gold prices in Dubai have closely followed fluctuations in global markets throughout February and early March.
Gold prices in Dubai began February near Dh585 per gram and gradually climbed above Dh600 in mid-month as international bullion markets strengthened.
Momentum picked up toward the end of February, with prices rising past Dh629 before surging further in the final days of the month.
The rally peaked in early March, when 24-karat gold briefly reached Dh641 per gram and 22-karat gold approached Dh593.50.
Prices later pulled back as global markets responded to rising bond yields and a stronger US dollar.
Volatile Week for Gold Trading
Gold prices in Dubai remained volatile over the past week, fluctuating between Dh611 and Dh619 before Friday’s modest rebound.
Global Markets Drive Bullion Swings
Heightened geopolitical tensions have boosted demand for safe-haven assets, while a stronger US dollar and rising Treasury yields have put pressure on prices.
During global trading, bullion climbed as much as 1.2%, briefly surpassing $5,100 an ounce. Despite this uptick, prices are set for a weekly loss of nearly 3%.
The US dollar has strengthened significantly over the week, rising about 1.3%, its largest weekly gain since November 2024. US Treasury yields have also increased, reaching their highest levels in several weeks.
A stronger US dollar and higher borrowing costs typically weigh on gold, as the metal does not earn interest.
Expectations for US interest rate cuts have also shifted quickly. Traders in swaps markets now anticipate about 34 basis points of Federal Reserve rate reductions by year-end, down from roughly 60 basis points expected just a week ago.
Global financial markets have remained on edge as the conflict involving the United States, Israel, and Iran continues, driving sharp reactions in energy, commodities, bonds, currencies, and equities.
Iran launched missiles and drone attacks across parts of the Gulf region on Thursday evening, striking an oil refinery in Bahrain. Meanwhile, Israel continued air operations targeting Tehran, and the United States suspended operations at its embassy in Kuwait.
The conflict has pushed energy markets sharply higher, with oil prices on track for their biggest weekly gain since 2022, amid fears of supply disruptions. Attacks on energy infrastructure and escalating tensions around the Strait of Hormuz—a key route for global oil shipments—have raised concerns about the stability of international oil supplies.
Gold remains resilient despite recent pullbacks, continuing to record strong gains in 2026 as investors seek safe-haven assets amid geopolitical uncertainty.
Liquidity pressures add volatility
Recent swings in global equity markets have also affected gold. Sharp declines in stocks this week led some investors to sell gold to raise cash, exposing bullion to broader market movements despite its traditional defensive role.
Gold prices have climbed nearly 20% since the start of the year, driven by geopolitical instability, volatile energy markets, and uncertainty around global trade policy.
Policy developments in Washington have also contributed. US President Donald Trump’s approach to trade and geopolitics, coupled with concerns about the Federal Reserve’s independence, has encouraged investors to increase exposure to safe-haven assets like gold.
Liquidity pressures add volatility
Recent swings in global equity markets have also affected gold. Sharp declines in stocks this week led some investors to sell gold to raise cash, exposing bullion to broader market movements despite its traditional defensive role.
