Dubai gold prices drop below Dh500 per gram amid Middle East conflict, high oil prices

Gold prices in Dubai plunged below Dh500 per gram on Monday evening, losing approximately Dh17 per gram, as prices hit a seven-month low amid Middle East geopolitical tensions and high oil prices.

According to Dubai Jewellery Group data, 24K gold prices fell to Dh499.75 per gram on Monday evening, down from Dh516.50 per gram over the weekend.

Similarly, 22K, 21K and 18K gold prices also fell to Dh462.75, Dh443.50 and Dh380.25 per gram, respectively.

Spot gold plunged three per cent to $4,149 per ounce.

“Gold is down three per cent today, and the story goes beyond just a simple risk-off sentiment. The lack of progress in US-Iran diplomacy keeps geopolitical risks alive, but it also keeps oil and inflation risks firmly in the picture. Market participants are starting to face the reality of a high-interest-rate environment as the Fed may have positioned to front-load rate hikes. At the same time, higher Treasury yields make gold harder and harder to hold as rates keep recording levels untested in a generation,” said Ahmad Assiri, market strategist at Pepperstone.

He added that Monday’s drop was a sharp move in historical context.

“The daily left-tail falls of this size have occurred only about 1.7 per cent of the time in the last two decades. For me, this means $4,000 is now gold’s north star in the current stressed environment. If yields stay elevated and rate expectations keep shifting higher, as well as three-digit oil prices, the market is likely to be drawn towards that level even with turbulent geopolitical headlines,” he added.

Ole Hansen, head of commodity strategy at Saxo Bank, said gold’s resilience was being tested by surging US real yields and a stronger dollar.

“Gold trades around $4,150 after breaking below key support near $4,230 during Asian trading. Silver, meanwhile, has slumped five per cent, facing additional pressure from concerns about slowing global growth. The weakness reflects a combination of surging bond yields, a stronger dollar and technical selling following the support break, potentially amplified by profit-taking from Chinese investors ahead of the Golden Week holiday,” Hansen added.

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