Dubai gold prices plunge Dh10 amid rising US-Iran tensions: Is it time to buy?

Dubai: Dubai’s gold prices saw a significant afternoon slump today, offering a lucrative window for consumers looking to buy.

The price of 24K gold dropped nearly Dh10 per gram, trading at Dh526.75 compared to yesterday’s Dh537.00. Similarly, the highly popular 22K gold fell to Dh487.75 per gram, down from Dh497.25 yesterday.

This consumer windfall in the local markets is being directly driven by escalating geopolitical tensions abroad. Gold prices have tumbled to a two-month low as fresh U.S. military strikes on Iranian facilities have unexpectedly boosted the strength of the U.S. dollar.

(Check latest UAE gold prices here, alongside prices in Saudi Arabia, Oman, Qatar, Bahrain, Kuwait, and India.)

While gold is traditionally seen as a safe-haven asset during times of war, the current conflict is threatening to disrupt the Strait of Hormuz, causing a spike in global oil prices. Higher fuel prices accelerate inflation, prompting investors to bet that central banks will keep interest rates higher for longer.

As a result, dollar-backed assets like U.S. Treasury bonds are becoming more attractive to investors, pulling capital away from non-yielding metals like gold.

According to Antonio Di Giacomo, Senior Market Analyst at XS.com, gold is facing "heavy profit-taking among investors" despite structural support from global uncertainty.

He said "the market still believes that geopolitical risk has not fully disappeared," meaning the precious metal could continue facing downward pressure in the short term, even as it retains its long-term appeal as an inflation hedge.

Expatriates monitoring their home markets for wedding or investment purchases are also seeing some relief, though the drop is slightly softer.

While Indian buyers are enjoying this dip, the rupee's relative performance against the surging U.S. dollar has kept domestic prices from crashing as dramatically as international spot rates.