Gold prices in Dubai opened lower on Monday, tracking global declines after heightened geopolitical tensions in the Gulf region unsettled investors.
The drop followed remarks by Donald Trump, who called for the US Navy to enforce a blockade on Iranian shipping through the Strait of Hormuz, a critical artery for global energy supplies. The move has added uncertainty to financial markets already reacting to ongoing conflict in the region.
At the start of trading in Dubai, 24-carat gold fell by Dh3.25 per gram to Dh569.00. Other variants also recorded declines, with 22K priced at Dh526.75, 21K at Dh505.00, 18K at Dh433.00 and 14K at Dh337.75 per gram. Despite the dip, jewellery retailers in the emirate are attempting to attract buyers by lowering making charges and offering promotional discounts ahead of the festive season.
Internationally, gold prices were also under pressure. Spot gold slipped by 0.56 per cent to $4,721.94 per ounce, while silver saw sharper losses, falling nearly two per cent to $74.44 per ounce.
Market analysts say the precious metal remains in a broader upward trend, though short-term volatility continues to shape price movements. According to Alex Kuptsikevich, chief market analyst at FxPro, gold has shown resilience since a sharp decline in late March, frequently rebounding after approaching key technical levels.
He noted that prices are currently hovering near the lower boundary of a trading range around $4,750, while the upper limit stands near $5,000. A strong recovery from the 200-day moving average in recent weeks has supported bullish sentiment, while the downward trend in the 50-day moving average has gradually reduced the threshold for further gains.
However, analysts also warn of underlying risks. A decline of more than 20 per cent from peak levels is often seen as an indication of a bear market. While recent rebounds suggest some investors are buying at lower levels, there are concerns that the upward momentum may not be sustained.
Historical comparisons point to a similar pattern in 2011, when gold experienced a sharp correction followed by a recovery that failed to revisit previous highs for several years. Adjusted to current conditions, some projections suggest prices could rebound toward $5,200, though this scenario remains uncertain.
Broader economic factors are also influencing sentiment. Concerns about inflation, central bank policies and a weakening global outlook are contributing to cautious trading, with both retail and institutional investors showing signs of increased selling interest as prices approach key resistance levels.
