Gold regains shine as Middle East tensions grow — silver plays catch-up

Dubai: Gold prices are inching higher again, but UAE shoppers and investors may be wondering — will this trend last, or is it just a short-lived bounce?

According to Daniela Sabin Hathorn, senior market analyst at Capital.com, “Gold prices have staged a notable resurgence over the past week, as geopolitical tensions once again dominate investor sentiment.” In short, global fears are back — and with it, gold’s status as a safe-haven asset is shining once more.

The latest rally was triggered by the intensifying conflict between Israel and Iran. Reports that Israeli attacks may have set back Iran’s nuclear program by months sparked investor concerns, and demand for gold spiked — although prices hovered near $3,380 an ounce by mid-week, after briefly testing the $3,440–$3,450 resistance zone.

For those in the UAE, this matters because local gold prices — like the popular 22K rate in Dubai — tend to mirror global moves. So even if the price changes seem small on the charts, it can translate to noticeable shifts in jewellery and investment bar prices locally. (Check the latest Dubai gold moves here.)

Beyond geopolitics, other tailwinds are also supporting gold. “All the tailwinds at the moment are pointing in that direction — trade, U.S. fiscal policy, and now geopolitics,” said Hathorn. She added that if U.S. inflation keeps cooling and the dollar weakens further, that could give gold another boost.

A weaker dollar typically pushes gold higher — and that’s good news for UAE investors buying in dirhams, since it keeps gold more affordable compared to buyers using stronger currencies.

Technically, gold remains bullish. “Momentum appears poised for further short-term upside,” Hathorn said, noting gold’s Relative Strength Index (RSI) has bounced back into positive territory.

But don’t expect fireworks just yet — resistance around $3,440 still seems strong. And if the U.S. Federal Reserve turns hawkish again or a sudden breakthrough in global diplomacy eases tensions, gold demand could ease just as quickly.

Silver, meanwhile, has had a more volatile ride. “Silver had shown surprising strength since the start of June,” said Hathorn, helped by both risk-on optimism and tight supply in the market. But the metal lost ground midweek as safe-haven flows shifted back toward gold.

This dual identity — part precious metal, part industrial — makes silver harder to predict. It tends to follow broader market sentiment more closely than gold.

Still, silver prices have held up relatively well, with investors showing interest even as global tensions escalated. That’s because while the situation in the Middle East has investors on edge, it hasn’t yet triggered a full-blown panic, allowing silver to ride on general economic hope.

Gold and silver are both back in the spotlight, but for different reasons. Geopolitical risks and a softer U.S. dollar are driving gold, while silver remains tied to both optimism and supply fundamentals.

If you're a UAE shopper or investor, this could be a good time to reassess your gold and silver buying plans — especially with global uncertainty far from over.

Just keep in mind what Hathorn cautioned: “Past performance is not a reliable indicator of future results.” But for now, at least, the shine is definitely back.