Gold prices maintained a flat line in the UAE on Monday morning, declining by AED1 per gram following the ceasefire agreement between the US and Iran. The markets exhibited minimal changes as investors maintained a conservative approach while considering both inflationary pressures and interest rates.
On Monday, the 24K gold saw a drop of AED 1 per gram to AED 555, compared to the prices recorded on previous Friday. The trend was consistent with other types of gold such as 22K gold trading at AED 513.75, 21K gold at AED 492.75, 18K gold at AED 422.25, and 14K gold at AED 329.50. This minimal change indicates that there may be some support from domestic factors in the UAE.
In international markets, spot gold was trading at $4,610.75 (AED 16,897.05) per ounce, down 0.4% as of 9.25 am UAE time. Similarly, silver was down by 0.6% at $75.2 (AED 276.24) per ounce. This suggests that investors favor the value of their currency rather than precious metal, especially amidst geopolitical uncertainty.
Vijay Valecha, Chief Investment Officer at Century Financial, said gold saw a brief rebound in the previous session due to oil profit-taking and dollar weakness linked to foreign exchange intervention expectations from Japan.
He warned that pressure on bullion persists, saying, “Gold continues to face downward pressure as long as geopolitical tensions persist and the Strait of Hormuz remains closed. The energy supply shock caused by the nine-week conflict has added to inflation risks, increasing the likelihood that central banks will keep rates steady for longer or even raise them, which is a headwind for non-yielding bullion.”
Valecha added that equity market corrections could trigger renewed selling in gold, though long-term support remains from central bank buying.
Gold is no longer reacting sharply to global tensions. Now policy expectations and inflation signals are more responsible for its movement. Until the interest rates do not find direction, gold prices might move within a range. In simple words, gold is now driven by macro data rather than geopolitical news.
Also Read: Dubai Gold Market Spikes, 24K Hits AED577.50 & Silver Jumps 6.45%