Gold rises in Dubai after sharp fall earlier this month

Dubai: Gold prices in Dubai moved higher again on Thursday morning, extending a modest recovery after a sharp decline earlier this month, though the broader trend still points to a cooling phase for bullion. (Check latest UAE gold prices here, alongside prices in Saudi Arabia, Oman, Qatar, Bahrain, Kuwait, and India.)

At 9:18 am, 24-karat gold was priced at Dh544.50, up from Dh543 a day earlier, while 22-karat rose to Dh504.25 from Dh502.75. The increase follows a brief rebound over the past two sessions, offering some relief after weeks of sustained declines.

From peak to pullback

The recent uptick comes against the backdrop of a steep correction through March. Prices had climbed above Dh600 earlier in the month, with 24-karat gold peaking above Dh620 levels before sliding sharply. By the third week of March, rates had dropped to the low Dh530 range, reflecting a broad pullback in global bullion markets.

Over the past few days, prices have stabilised and begun inching higher again, though still well below early March levels. The movement suggests buyers are returning cautiously, with sentiment still shaped by global macro signals.

Global cues keep pressure on gold

Internationally, gold has seen a slight recovery after gaining more than 2% over the past two sessions, trading near $4,520 an ounce in early deals. The bounce comes amid mixed signals around potential negotiations between the US and Iran, which continue to influence market sentiment.

Conflicting statements from both sides have kept uncertainty elevated. Washington has indicated that talks are ongoing and has outlined a multi-point proposal, while Tehran has publicly rejected those efforts and set its own conditions. Military deployments in the region have added to concerns about escalation.

Rates outlook limits upside

Despite geopolitical tensions, gold has struggled to regain its traditional safe-haven momentum. Since the conflict began nearly a month ago, prices have dropped close to 15%, moving broadly in line with equities and reacting inversely to oil.

Higher energy prices have increased inflation risks, leading investors to expect that central banks may hold interest rates higher for longer or even tighten further. That outlook reduces the appeal of gold, which does not offer yield.

At the same time, concerns about a potential slowdown in the US economy are beginning to build. Wall Street is lowering growth forecasts while raising expectations for inflation and unemployment, which could temper the pace of any future rate hikes.

The latest rise in Dubai gold prices signals short-term support, but the bigger picture remains uncertain. Buyers are likely to see continued fluctuations in the coming days, with global cues driving direction more than local demand.

Jewellery shoppers may find current levels more attractive compared to early March highs, while investors are expected to stay cautious until there is clearer direction on interest rates and geopolitical risks.

- With inputs from Bloomberg.