Dubai gold extends slide for fourth day as Iran war uncertainty persists

Dubai gold prices extended their slide for a fourth consecutive day on Thursday, with the 24-karat variant trading at Dh493 per gram. That represented a drop of Dh4.25 from the previous day’s Dh497.25 and a total decline of Dh7.5 since the market opened on Monday.

The other variants also moved lower: 22K at Dh456.5, 21K at Dh437.75, 18K at Dh375.25, and 14K at Dh292.75 per gram.

On global markets, spot gold fell 1.02 percent to $4,091.1 per ounce, while silver declined 2.15 percent to $56.35 per ounce.

Iran war uncertainty weighs on prices

Vijay Valecha, financial analyst and chief investment officer at Century Financial, said uncertainty over the Iran-US war and its implications for inflation and interest rates continued to put pressure on gold prices.

Gold has fallen by roughly a fifth since the conflict broke out in late February, as rising oil prices stoked concerns about inflation, he explained. Higher inflation could keep interest rates elevated for longer, increasing the headwind for gold, which does not pay interest.

Valecha noted that conflicting signals about progress toward ending the Iran war had added to uncertainty over the inflation outlook and the US Federal Reserve’s interest rate path. Oil prices have retreated from recent highs, but the conflict’s uncertainty continues to influence market expectations.

ETF holdings, central bank buying offer support

Despite the correction, investor demand and central bank purchases could help support gold prices, Valecha said. Holdings in gold-backed exchange-traded funds (ETFs) have climbed to a four-year high, even after gold’s decline from its late-August peak.

Central bank buying may also provide a floor for prices, signalling continued demand for the metal even as higher oil prices and bond yields pressure bullion. The current divergence between ETF holdings and gold prices suggests investors have continued adding to their positions despite the market correction, Valecha added.

Technical levels in focus

From a technical perspective, gold has traded between $4,070 and $4,220 per ounce this month. Valecha said a break above or below this range would help establish the metal’s next medium-term direction.

He identified $4,080 as a potential near-term support level, based on a trendline connecting several previous lows. If prices remain within the current range, gold could continue to face pressure as investors assess developments in the Iran war, oil prices, and the outlook for interest rates.