Dubai: Gold prices drop after hitting nearly 4-week high
Gold prices dropped in Dubai on Wednesday morning after hitting a nearly four-week high on Tuesday.
The 24-carat variant of the precious metal was trading at Dh404.5 per gram, down from around Dh406 per gram yesterday as it jumped over Dh10 to hit a nearly four-week high. Similarly, 22-carat, 21-carat and 18-carat dropped to Dh374.5, Dh355 and Dh307.75 per gram, respectively.
Spot gold was steady at $3,354.59 per ounce, up 0.07 per cent, as traders were jittery about the US-China trade deal.
Rania Gule, senior market analyst for Mena at XS.com, said gold is currently experiencing notable volatility, with prices touching levels near $3,400 per ounce before retreating slightly at the start of trading on Tuesday.
'This pullback does not necessarily reflect a weakening of bullish momentum, but rather a short technical pause in an overall upward trajectory still fuelled by several key factors, most notably escalating trade tensions, geopolitical developments, and potential shifts in US Federal Reserve policy. Gold continues to hold strong appeal as a hedging asset, and the current declines may represent medium-term buying opportunities rather than the start of a downward reversal,' she said.
'The pivotal event sparking fresh market anxiety was former President Donald Trump's announcement of plans to double tariffs on steel and aluminium imports to 50 per cent, a move that has reignited fears of a full-blown trade war with China and potentially other trading partners.
"Markets are not only reacting to the numbers but also to the political messaging behind such actions — this is where the real risk lies. The uncertainty surrounding international trade relations is naturally boosting demand for gold as a safe-haven asset, even if prices temporarily dip due to fluctuations in the US dollar," added Gule.
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