GOLD PRICES UNDER PRESSURE IN DUBAI AMID REGIONAL WAR
Gold prices remained under pressure despite a marginal gain on Tuesday morning amid ongoing military conflict in the Middle East region and surge in oil prices.
The 24K and 22K gold prices were trading at Dh484.5 and Dh448.75 per gram, respectively, at the market opening on Tuesday. While 21K, 18K and 14K were trading at Dh430.25, Dh368.75 and Dh287.75 per gram, respectively.
Spot gold was trading $4,021 per ounce, up 0.5 per cent. Silver was also up half a per cent to trade at $57.9 per ounce.
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Waleed Said, technical analyst at GivTrade, said gold fell despite rising US–Iran tensions because the inflation shock is overpowering the safe-haven trade.
“Higher oil prices are lifting Treasury yields and the dollar, making non-yielding gold less attractive. Geopolitical risk still provides support, but gold’s next move depends on whether fear-driven buying can outweigh persistent inflation and tighter interest-rate expectations,” he said.
Oil prices jumped more than nineper cent to a one-month high late on Monday after news that a US’ naval blockade due to begin on Tuesday will cover Iran’s entire coastline, ports and oil terminals, as well as all vessels regardless of flag, reigniting concerns over energy shipments through the Strait of Hormuz.
Brent crude futures settled up $7.29, or 9.59 per cent, to $83.30, while US West Texas Intermediate crude settled up $6.73, or 9.42 per cent, to $78.14 a barrel.
Brent and WTI were trading around one per cent higher at $84.06 and $79.25 a barrel, respectively, at 6.45am UAE time.
Linh Tran, market analyst at xs.com, said the resurgence of geopolitical risk failed to generate sufficiently strong safe-haven demand for gold.
“Following missile and drone attacks involving the United States and Iran, markets remained concerned that shipping activity through the Strait of Hormuz could be disrupted. Oil prices surged at the beginning of the week, pushing both WTI and Brent crude to their highest levels in around one month,” she said, adding that rather than simply increasing demand for safe-haven assets, the risk of energy supply disruptions has also raised concerns that higher fuel, transportation, and production costs could continue to drive inflation upward.
“This strengthens the possibility that the Federal Reserve may need to maintain a restrictive monetary policy for longer or even raise interest rates further if price pressures fail to ease,” added Tran.
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