Dubai gold drops after 3-day rally as Trump speech hits sentiment

Dubai: Gold prices in Dubai opened lower on Thursday morning, tracking a sharp shift in global sentiment that pushed bullion off recent highs and triggered fresh selling. (Check latest UAE gold prices here, alongside prices in Saudi Arabia, Oman, Qatar, Bahrain, Kuwait, and India.)

At 8:32 am, 24K gold was priced at Dh562.25, down from Dh573 a day earlier. The 22K variant dropped to Dh520.75 from Dh530.75, extending a pullback that has gathered pace over the past 24 hours.

The decline followed a volatile session globally, where gold reversed earlier gains after remarks from US President Donald Trump offered little clarity on the trajectory of the Middle East conflict.

March rally gives way to sharp correction

The latest dip comes after a dramatic month for gold buyers in the UAE, where prices swung widely between early March highs and late-month corrections.

Gold started the month at elevated levels, with 24K hovering above Dh620 and briefly pushing close to Dh630 in the first half of March. That momentum peaked around mid-March, when prices crossed Dh600 and stayed firm for several sessions.

A sharp reversal followed. Prices dropped quickly into the Dh540 range within days, reflecting a shift in global expectations around inflation, interest rates and geopolitical risks.

Short-lived rebounds appeared toward the end of the month, with gold attempting to recover into the mid-Dh560 range, but gains struggled to hold. The latest move lower suggests that the earlier upward trend has lost strength, leaving prices well below their March peak.

Trump remarks trigger market repositioning

Gold came under pressure after Trump said the conflict was nearing completion but warned that the US would hit Iran “extremely hard” over the next two to three weeks.

The comments unsettled markets. Equities moved lower, the US dollar strengthened and oil prices climbed, reflecting ongoing concern over energy flows through the Strait of Hormuz.

This combination reduced gold’s appeal in the short term. Investors moved to raise cash and cover losses in other asset classes, weakening demand for bullion despite lingering geopolitical risk.

Haven demand fades amid liquidity pressure

The recent pattern in gold markets has been driven less by traditional safe-haven demand and more by liquidity needs across global portfolios.

During periods of stress, investors have increasingly sold gold to offset losses elsewhere, limiting its upside even when geopolitical risks remain elevated.

That dynamic has kept prices volatile. A near 12% drop in March marked the steepest monthly decline since 2008, highlighting how quickly sentiment can turn when inflation concerns and interest rate expectations shift.

- With inputs from Bloomberg.