Dubai gold price drops Dh10 in a day amid global market volatility

Dubai: Gold buyers in the UAE received a brief window of relief on Monday morning after local bullion prices dropped by around Dh10 per gram, reversing part of the strong rally that had pushed prices close to record highs earlier in the month.

By 9.30 am on March 9, the price of 24K gold in Dubai stood at Dh613.25 per gram, down from Dh623.25 recorded on Sunday. The widely traded 22K variety also fell by roughly Dh10, settling at Dh567.75 compared with Dh577.25 a day earlier. (Check latest UAE gold prices here, alongside prices in Saudi Arabia, Oman, Qatar, Bahrain, Kuwait, and India.)

The decline comes after a period of intense volatility in global markets, during which gold has been pulled in different directions by geopolitical tensions, currency movements, and interest rate expectations.

Gold prices in the UAE have swung sharply in recent weeks, reflecting turbulence in global markets. Early February saw 24K gold trading close to Dh598 per gram before gradually climbing above Dh610 by mid month. Prices then pushed higher toward the end of February, touching Dh636 in several sessions.

Momentum intensified at the start of March when bullion briefly surged to around Dh641 per gram, marking one of the strongest levels recorded this year. The rally did not hold, however, with prices retreating back toward the Dh620 range before Monday’s drop brought the market closer to Dh613.

The 22K category followed a similar trajectory. Prices began February near Dh554 before climbing steadily above Dh580 toward the end of the month. Early March witnessed a spike close to Dh593 before the market cooled, eventually sliding back below Dh570 on Monday morning.

International gold prices have come under pressure from a stronger US dollar and rising expectations that interest rates could stay elevated for longer.

Bullion fell sharply in global markets, dropping as much as 3% during trading and briefly touching around $5,015 an ounce before recovering part of the losses. The move followed the first weekly decline in more than a month.

Energy markets have also added another layer of volatility. Oil prices have surged toward the $120 mark after major producers in the Gulf region curtailed output amid the continuing conflict involving the US, Israel and Iran.

Higher crude prices often feed inflation concerns in the US, increasing the likelihood that the Federal Reserve keeps borrowing costs elevated. Precious metals typically struggle in such conditions because gold does not generate interest income.

The US dollar has strengthened at the same time, climbing against major currencies and drawing investors toward dollar liquidity during a period of market stress.

Analysts say the current weakness in gold may prove temporary if geopolitical tensions persist.

Mohanad Yakout, Senior Market Analyst at Scope Markets, said gold is currently balancing between safe haven demand and the strength of the US dollar.

“Gold prices are currently navigating a complex environment between escalating geopolitical risks and a robust US dollar,” Yakout said. “While the intensified conflict involving the U.S, Israel, and Iran has naturally triggered a surge in safe-haven demand, the impact on gold has been tempered by the simultaneous rally of the greenback.”

Investors are increasingly moving toward dollar liquidity during the current market turbulence, which has limited gold’s ability to extend its rally despite heightened geopolitical risks.

Despite the recent pullback, gold has still delivered strong gains this year and continues to attract institutional demand.

Prices have risen roughly 18% since the start of the year, supported by persistent geopolitical uncertainty and ongoing buying by central banks seeking to diversify reserves.

China’s central bank extended its gold buying streak to 16 months in February, reinforcing long-term demand in the global bullion market.

Yakout believes prolonged geopolitical tensions could ultimately push prices higher again.

“Despite this short-term consolidation, the outlook for gold remains decidedly bullish should the conflict persist,” he said. “If the war continues for a longer duration, the resulting disruptions to global trade and energy supply, compounded by potential inflationary pressures, are expected to eventually push gold prices higher.”

Long-term structural trends also remain supportive.

“Continued central bank diversification and the persistent debasement trade suggest that the current price levels may serve as a floor before the next major leg of the rally toward the $5,500 to $6,000 range,” Yakout said.