Gold prices in Dubai fell on Tuesday morning following a decline in global rates, which dipped below the $2,900 per ounce mark. The drop comes as investors navigate geopolitical uncertainties and economic factors influencing the precious metals market.
According to data from the Dubai Jewellery Group, the price of 24K gold opened at Dh349.25 per gram at 9 a.m. on Tuesday, down from Dh349.75 per gram at Monday’s market close. Other gold variants also saw price drops, with 22K trading at Dh324.75 per gram, 21K at Dh311.50 per gram, and 18K at Dh267.00 per gram.
Global Market Trends and Geopolitical Factors
Despite the drop in Dubai, global gold prices saw a slight rebound, with gold trading at $2,898.14 per ounce, marking a 0.2% increase. However, ongoing geopolitical tensions are contributing to price fluctuations.
Linh Tran, a market analyst at xs.com, pointed to prolonged geopolitical risks following last week’s clash between former U.S. President Donald Trump and Ukrainian President Volodymyr Zelensky.
“Both sides have since taken further actions, with the U.S. temporarily halting aid to Ukraine and Ukraine responding that they will continue their efforts despite lacking U.S. support,” Tran explained. “However, the U.S. has emphasized that this is a ‘temporary pause,’ while the Ukrainian president has continued to express a desire to reach an agreement with the U.S.”
This uncertainty is expected to persist until Wednesday, leading investors to adopt a wait-and-see approach regarding safe-haven assets like gold.
Impact of U.S. Economic Health on Gold Prices
Beyond geopolitical concerns, the health of the U.S. economy remains a key factor influencing gold prices. Investors are closely watching economic indicators, including inflation data and interest rate decisions from the U.S. Federal Reserve, which could impact gold’s appeal as a hedge against economic instability.
Gold is traditionally viewed as a safe-haven asset, and its price tends to rise during times of uncertainty. However, market analysts suggest that short-term fluctuations will continue, influenced by a mix of global political developments and economic data.
Market Outlook
While gold prices in Dubai have softened, analysts predict continued volatility in the precious metals market as investors assess the impact of geopolitical events and economic conditions. The coming days will be crucial in determining whether gold prices stabilize or face further declines.
