Gold prices in Dubai opened slightly lower on Thursday but remained at high levels due to geopolitical tensions in the Middle East. At 9am UAE time, 24K gold was selling for Dh321.5 per gram, while other variants such as 22K, 21K, and 18K were also trading lower. Spot gold was down 0.15 per cent at $2,656.2 per ounce at the same time.
Rania Gule, a senior market analyst, stated that gold is currently trading near $2,650.40 due to escalating geopolitical tensions in the Middle East and volatile economic data. The recent surge in gold prices was triggered by the developments in the region, prompting investors to seek it as a safe-haven asset. However, the price quickly retreated due to the strength of the US labor market, limiting the likelihood of significant monetary easing by the Federal Reserve.
The pressure on gold prices also stems from the strengthening US dollar, which has been consolidating its gains over the past few days. Despite this, the possibility of an escalation in the Middle Eastern conflict continues to support gold prices. Political tensions in the region play a crucial role in maintaining a certain level of support for gold. Gule believes that these tensions are a fundamental driver for gold, and any diplomatic or military escalation could trigger new buying. Investors are cautiously approaching gold, viewing any price drop as a buying opportunity under the current circumstances.
Given the delicate balance between geopolitical concerns and US economic expectations, any deviation in economic data or political events can influence gold prices significantly. The contrasting factors in the market have led investors to adopt a cautious approach towards gold. Despite the downward pressure from the strengthening dollar and robust US labor data, gold continues to receive strong support from geopolitical fears. The tensions in the Middle East are likely to play a key role in directing gold prices in the near future.
In conclusion, gold prices in Dubai opened lower but remained at high levels due to geopolitical tensions in the Middle East. The recent surge in gold prices was driven by escalating tensions in the region, prompting investors to seek gold as a safe-haven asset. The strength of the US dollar and robust US labor data are exerting downward pressure on gold prices, but the possibility of further escalation in the Middle East conflict continues to support gold. Investors are cautiously approaching gold, viewing any price drop as a buying opportunity under the current circumstances.
