Dubai gold prices hold firm at record highs as Iran tensions keep markets on edge

Dubai: Dubai’s gold rates opened unchanged Monday morning after a volatile week in global markets, with shoppers and investors watching whether Middle East tensions and rising oil prices will push bullion higher again in the days ahead.

The comes despite international gold prices slipping in early trade, signalling that UAE buyers are still seeing elevated rates hold near historic highs.

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In Dubai, 24K gold opened at Dh568.25 per gram on Monday morning, unchanged from Sunday evening’s close.

Meanwhile, 22K gold held steady at Dh526.25 per gram. The flat opening suggests the local market is pausing after sharp swings last week, when international gold prices climbed amid fears surrounding the ongoing US-Iran conflict and disruptions around the Strait of Hormuz.

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Global market trends

International gold prices, however, edged lower as markets reopened after the weekend. Spot gold was trading near $4,678 per ounce in early Asian trade, while international rates quoted in the UAE market showed a 0.54 per cent decline to $4,661.05.

Market analysts say bullion is facing pressure from two competing forces — rising geopolitical risks, which usually support safe-haven demand for gold, and growing fears that higher oil prices could keep inflation and interest rates elevated for longer.

Higher interest rates typically reduce the appeal of non-yielding assets such as gold.

Regional trends

Saudi Arabia’s gold market also mirrored Dubai’s stability on Monday morning. The price of 24K gold held unchanged at SAR586 per gram, while 22K gold remained steady at SAR535 per gram.

The lack of movement across Gulf markets reflects cautious trading sentiment as investors assess developments in the Middle East and wait for fresh US inflation data later this week.

According to Reuters, gold prices slipped after hopes for a quick diplomatic breakthrough between the US and Iran faded again. US President Donald Trump rejected Iran’s latest response to a US peace proposal over the weekend, raising fears that the conflict could drag on further.

The conflict has already disrupted shipping routes around the Strait of Hormuz and pushed oil prices higher, adding to inflation concerns globally. Analysts say this is becoming a key driver for gold markets because persistent inflation could force the US Federal Reserve to keep interest rates higher for longer.

Tim Waterer, chief market analyst at KCM Trade, told Reuters that markets are now unwinding expectations of a near-term peace deal, while rising crude oil prices are adding fresh pressure on gold.

Bloomberg reported that bullion prices had risen about 2 per cent last week before Monday’s pullback. Analysts also noted that attacks over the weekend near the Gulf region highlighted how fragile the current ceasefire situation remains.

Investors are now closely watching upcoming US consumer inflation data and signals from the Federal Reserve for clues on the direction of interest rates. Stronger inflation readings could further strengthen the US dollar, making dollar-priced gold more expensive for overseas buyers.

Despite Monday’s dip, analysts believe gold could continue trading within a broad $4,400-$4,800 per ounce range in the near term as geopolitical uncertainty and energy market disruptions continue to dominate investor sentiment.