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Gold shoppers in Dubai encountered higher prices once again on Friday, as bullion continued its upward movement amid geopolitical uncertainty and questions over the future path of US interest rates.
By 9.30am, the price of 24-karat gold had climbed to Dh602.50 per gram, compared with Dh601.75 the previous day. Meanwhile, 22-karat gold increased to Dh558 per gram, up from Dh557.25 on Thursday.
Safe-haven demand strengthened by global tensions
In international markets, gold hovered close to the $5,000-per-ounce mark following two straight sessions of gains. Prices have been underpinned by escalating tensions in the Middle East, which have pushed investors toward traditional safe-haven assets.
Market sentiment shifted after Donald Trump said talks over a potential nuclear agreement with Iran were entering a narrow timeframe, warning that only 10 to 15 days remained before further steps could be taken. At the same time, US military activity in the region has increased, with analysts describing it as the most significant buildup since before the 2003 Iraq war.
Gold gained more than 2% over the previous two sessions, reflecting heightened demand for defensive investments during periods of geopolitical risk.
Interest rate outlook still in focus
Expectations around US interest rates continue to play a key role in gold’s direction. The metal generally benefits when borrowing costs ease, but recent remarks from Federal Reserve Governor Stephen Miran suggested a more cautious approach to rate cuts this year. Stronger-than-expected US economic data has added another layer of uncertainty to policy expectations.
Volatility amid longer-term optimism
Despite its broader strength, gold has seen sharp price swings in recent weeks. Earlier this month, prices fell rapidly from record highs above $5,595 an ounce to around $4,400 within just two days, following a wave of profit-taking after heavy speculative buying.
While that correction highlighted short-term volatility, analysts say the longer-term outlook remains supportive. Structural factors such as declining confidence in sovereign bonds and major currencies continue to underpin demand.
Several major financial institutions, including BNP Paribas, Deutsche Bank and Goldman Sachs, expect bullion prices to regain upward momentum later in the year, driven in part by ongoing purchases from central banks.
Central banks have remained net buyers as they seek protection against geopolitical and financial instability, although sharp price fluctuations briefly slowed purchases toward the end of last year.
Supply pressures add to support
Supply-side developments are also influencing market expectations. Newmont, the world’s largest gold producer, recently said output is likely to fall by about 10% this year due to planned upgrades at several mining operations.
Analysts note that tighter supply, combined with persistent geopolitical risks and uncertainty over monetary policy, could keep gold prices well supported in the near term — meaning Dubai consumers may continue to face elevated retail rates in the weeks ahead.
