Gold prices inched higher in Dubai on Tuesday morning after losing some gains on Monday evening.
According to Dubai Jewellery Group data, 24K, 22K and 21K gold prices were trading at Dh505.75, Dh468.25 and Dh449.0 per gram, respectively.
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Spot gold was up 0.8 per cent at $4,199 an ounce as oil prices slipped, while markets focused on the upcoming US inflation data for fresh signals on the Federal Reserve’s interest-rate trajectory.
Naeem Aslam, CIO, Zaye Capital Markets, said gold’s recovery reflects improving conditions for precious metals as declining energy prices and a relatively subdued US dollar reduce pressure on bullion.
“US President Donald Trump’s announcement of a proposed energy ceasefire between Russia and Ukraine, alongside an agreement to increase Russian diesel supplies, has contributed to falling oil prices. Lower energy costs could support gold by reducing expectations for restrictive monetary policy, although sustained price appreciation will depend on whether Treasury yields and the dollar continue to moderate,” he said.
Geopolitical uncertainty remains another important driver of gold’s safe-haven demand.
“Although President Trump announced an immediate energy ceasefire, continuing attacks on energy infrastructure have raised doubts about its implementation, leaving the possibility of further disruptions to global energy supplies,” he added.
Aslam believes any credible reduction in regional tensions could temporarily weaken demand for defensive assets, particularly if investors increase exposure to equities.
“Conversely, renewed disruptions to energy shipments or a deterioration in diplomatic negotiations could strengthen gold demand. The critical distinction is whether lower oil prices reduce inflation expectations sufficiently to outweigh any decline in geopolitical risk premiums.”