Dubai gold slides again, down Dh15 in a week amid war risks

Dubai: Dubai gold prices moved lower on Tuesday morning, adding to a run of declines that has taken shape since the start of April.

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At 8.24am, 24K gold was at Dh557.25, down from Dh561 on Monday, while 22K slipped to Dh516 from Dh519.50. The drop continues a clear downward pattern that has seen prices retreat from Dh573 at the beginning of the month, with each session gradually easing lower and pushing bullion closer to the mid-Dh550 range.

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The shift marks a notable cooling in momentum after the late-March highs, with buyers now watching for clearer signals before stepping back in.

Global markets turn cautious

International prices are also under pressure, with gold falling below $4,620 an ounce after losing more than 2% across the previous two sessions.

Market sentiment has turned cautious as geopolitical risks intensify. US President Donald Trump has warned of potential strikes on Iranian infrastructure if no agreement is reached, raising the stakes in a conflict that has already disrupted energy flows and driven up inflation concerns.

The war has now entered its sixth week, adding uncertainty to global growth expectations and keeping investors on edge.

Interest rates remain the key drag

Pressure on gold is increasingly tied to expectations around US interest rates.

Treasury yields are holding around 4.3% to 4.4%, while the dollar remains firm. That combination has reduced demand for gold, which does not generate yield, and is limiting any strong upside move in the near term.

Linh Tran, Market Analyst at XS.com, said the recent decline reflects hesitation across markets.

“Gold recorded its second consecutive session of decline, reflecting growing caution in the market as macro factors have yet to provide a clear directional catalyst.”

Economic data has offered little relief. The latest US ISM Services reading came in below expectations, yet markets showed limited reaction.

“The market is shifting its focus toward upcoming key data releases, including GDP, PCE, and CPI,” Tran said.

Repositioning after strong rally

Recent price action also points to investors adjusting positions after the earlier rally in gold.

Profit-taking and deleveraging have picked up pace ahead of key inflation data, which will play a major role in shaping the Federal Reserve’s next move.

“The primary pressure on gold at this stage continues to come from elevated US Treasury yields alongside the sustained strength of the US dollar,” Tran said.

Persistently high oil prices are also feeding inflation concerns, reinforcing expectations that borrowing costs could stay elevated for longer.

What buyers should watch now

Despite the ongoing slide, there are early signs that some investors are returning at lower levels. Holdings in gold-backed exchange-traded funds edged higher last week, suggesting selective dip-buying is starting to emerge.

Tran believes the current move is part of a broader adjustment phase.

“The current pullback is more likely a technical correction and repositioning phase rather than a structural trend reversal.”

Attention now turns to upcoming US inflation data. A softer reading could revive expectations of rate cuts and support prices, while persistent inflation and high yields are likely to keep gold under pressure.

- With inputs from Bloomberg.