Dubai: The ongoing trade dispute between the US and China — as well as potential risk from the Turkish elections — are expected to take the forefront in global financial markets this week.

But even amid a seemingly risk-off trade environment, gold prices are unlikely to gain amid a lack of demand for the precious metal, analysts said.

Gold prices have been falling over the past several trade sessions, dropping from around $1,310 (Dh4,811) on June 14 to their current level of $1,270 amid a strengthening US dollar that is buoyed by rate hikes from the US Federal Reserve.

“With the fundamental drivers behind gold’s depreciation still in place, further weakness could be seen in the medium to longer term,” according to an analyst note from FXTM.

Jameel Ahmad, FXTM’s global head of currency strategy and market research, said gold is likely to be “one of the major losers,” if traders continue to buy the US dollar.

“The main asset class that I am watching this week is the dollar and whether it can continue challenging new 2018 highs in light of the trade war threats,” he said.

“One of the reasons why traders are supposedly buying the greenback in spite of the United States being in the thick of a trade war threat is because it is thought the US economy will not be as much exposed to the negative ramifications of a trade war, in comparison with those economies and sectors [President Donald] Trump is targeting elsewhere.”

But it’s not just gold that stands to bear the brunt of a stronger US dollar.

“The current risk of trade protectionism means questions are being raised about the impact on growth and subsequent demand going forward. This is potentially one of the biggest challenges commodities will face over the coming months,” said a note from Ole Hansen, head of commodity strategy at Saxo Bank.

Last week, the US president threatened additional tariffs on $200 billion worth of Chinese goods, following an earlier 25 per cent tariff he had announced on $50 billion worth of Chinese goods. China responded in kind, announcing it would impose its own tariffs, a move that soured sentiment across equity markets.

The Dow Jones Industrial Average has, however, been relatively resilient, and is nearly flat year-to-date despite concerns on trade wars.