Dubai gold prices climb again. Global tensions reshape buyer decisions

Dubai: Dubai gold prices edged higher on Wednesday morning, extending a volatile month shaped by global trade tensions, geopolitical risks and shifting expectations around US interest rates, all of which continue to steer investor appetite toward safe-haven assets. (Check latest UAE gold prices here, alongside prices in Saudi Arabia, Oman, Qatar, Bahrain, Kuwait, and India.)

At 8.20 am, the price of 24-karat gold stood at Dh623.25 per gram, up from Dh619.75 a day earlier, while 22-karat rose to Dh577 from Dh573.75, reflecting a modest rebound following sharp swings earlier in the week.

Global bullion markets showed a similar pattern. Gold rose up to 1% during Asian trading, recovering from the previous session’s decline, with investors reacting to uncertainty around US trade policy and escalating geopolitical tensions in the Middle East. A weaker dollar and continued concerns about sovereign debt levels also supported demand for hard assets.

Gold has stabilised above the $5,000 per ounce mark, recovering more than half the losses recorded during the sharp sell-off at the start of the month.

Dubai’s gold market has seen pronounced volatility throughout February, though the broader direction remains upward. Prices began the month near Dh589 per gram for 24K before dropping briefly to the Dh564 range early in the month. A steady rally then pushed prices past Dh600 by mid-February, followed by sharp fluctuations between Dh615 and Dh626 over the past week, reflecting rapid shifts in global sentiment.

The month’s trajectory highlights how closely local retail rates track global developments, particularly movements linked to trade tensions, currency fluctuations and geopolitical developments.

Investor sentiment remains heavily influenced by US trade policy after the implementation of a broad 10% import levy this week, along with the possibility of further tariff increases. Markets are also reacting to the prospect of new national security investigations into certain imports, which could widen the scope of trade restrictions.

At the same time, Federal Reserve policy expectations continue to shape gold’s outlook. Minutes from the central bank’s January meeting indicated officials remain cautious about cutting interest rates, a stance that supports gold by sustaining uncertainty around borrowing costs and economic growth.

Concerns over rising sovereign debt levels have also strengthened what analysts describe as the “debasement trade,” with investors shifting away from currencies and bonds toward tangible assets such as gold.

Rania Gule, Senior Market Analyst at XS.com MENA, said recent movements in silver underline the broader forces driving precious metals.

“Silver has witnessed dramatic moves in recent days, reflecting the sensitivity of this dual-natured metal, both investment and industrial, to political and monetary shocks at the same time,” she said.

She noted that trade escalation typically revives demand for hedging assets, though silver reacts differently due to its strong link to industrial demand. According to her analysis, recent volatility reflects rapid repricing after a political shock rather than a fundamental change in the long-term outlook.

“The tariff shock was the spark, but the real fuel lies in the structural supply deficit and accelerating industrial demand,” she said, adding that precious metals remain supported while global uncertainty persists.

Market direction in the coming weeks will depend largely on upcoming US economic data, including inflation and labour market indicators, which will influence interest rate expectations and currency movements.

Continued geopolitical tensions and trade uncertainty are expected to keep safe-haven demand elevated, suggesting that gold prices in Dubai may remain volatile but supported in the near term.

- With inputs from Bloomberg.