Dubai gold prices retreat nearly Dh30 after record surge

After scaling fresh highs earlier this week, gold prices in Dubai reversed course sharply on Tuesday evening, tracking a broad-based decline in international markets.

The price of 24K gold in the UAE slipped from Dh641 per gram to Dh614, marking a steep Dh27 drop within 24 hours. Similarly, 22K gold retreated to Dh568.75 per gram, down from Dh593 the previous day. The sudden correction follows a global pullback in bullion prices after a strong rally.

In overseas trading, spot gold fell as much as 5.6% to $5,029.59 per ounce after reaching a multi-week high in the previous session. Market analysts linked the downturn to a strengthening US dollar and rising Treasury yields, both of which tend to weigh on non-yielding assets like gold.

Bob Haberkorn, senior market strategist at RJO Futures, said investors appeared to be shifting towards liquidity, favoring cash positions as bond yields climbed and the dollar gained momentum.

At the same time, geopolitical tensions continue to influence sentiment. The Iran conflict has intensified, with reports of explosions in Tehran and Beirut. Concerns escalated further after claims that the Strait of Hormuz had been closed, a development that could disrupt global energy flows.

Oil markets reacted swiftly, with crude prices jumping more than 8% amid fears of prolonged supply disruptions. Fawad Razaqzada, market analyst at City Index and FOREX.com, noted that risks to energy infrastructure and tanker routes could sustain higher oil and gas prices, adding to inflationary pressures and potentially delaying anticipated interest rate cuts.

While gold is traditionally viewed as a hedge against inflation and geopolitical instability, it typically performs better when borrowing costs are lower. Elevated yields can reduce its appeal because the metal does not generate income.

In a recent market commentary, Heraeus suggested that historical trends indicate the current correction could extend further. However, analysts also believe that safe-haven demand linked to geopolitical uncertainty may provide a supportive floor for gold and silver prices.

Despite this week’s drop, gold remains significantly higher on a year-to-date basis, having gained around 17% so far this year, following a powerful rally in 2025 driven by global economic and political uncertainty.