UAE Gold Prices Drop Dh4 Per Gram as Oil Surge, Strong Dollar Pressure Bullion
Dubai, UAE — Gold prices in the UAE slipped on Thursday, March 12, as rising oil prices and a stronger US dollar weighed on the precious metal’s appeal. The decline came despite ongoing geopolitical tensions in the Middle East, which typically support gold as a safe-haven asset.
According to market data, the price of 24-karat gold in Dubai opened at Dh619.75 per gram, down from Dh623.75 per gram the previous day, marking a drop of about Dh4 per gram. Other variants also saw a decline, with 22K gold priced at Dh574.00, 21K at Dh550.25, 18K at Dh471.75, and 14K at Dh368.00 per gram.
Globally, the trend was similar. Spot gold slipped about 0.49 per cent to $5,146.9 per ounce, while silver also fell by the same percentage to around $84.92 per ounce.
The drop in gold prices is largely linked to the sharp rise in crude oil prices. Oil surged past the $100-per-barrel mark amid escalating tensions in the Gulf region and concerns about disruptions to shipping and energy infrastructure.
Higher oil prices can trigger inflation fears and strengthen the US dollar. When the dollar gains strength, commodities priced in dollars—such as gold—become more expensive for investors using other currencies, reducing demand and putting downward pressure on prices.
The US dollar index rose about 0.3 per cent, further weighing on gold markets. Analysts note that this currency movement has been a key factor behind the metal’s recent weakness.
Market experts say gold’s decline may appear unusual because geopolitical crises often push investors toward safe-haven assets like the yellow metal. However, the current situation is more complex.
Nicholas Frappell, global head of institutional markets at ABC Refinery, explained that the strengthening dollar and rising interest-rate expectations are acting as headwinds for gold. Even though the geopolitical environment would normally boost the metal, currency dynamics are currently having a stronger impact on prices.
Higher oil prices are also fuelling concerns that inflation could remain elevated. If inflation stays high, central banks—especially the US Federal Reserve—may delay interest-rate cuts. Such expectations tend to weaken gold because the metal does not yield interest, making interest-bearing assets relatively more attractive.
Gold markets have been extremely volatile in recent weeks as investors react to shifting developments in the Middle East. The ongoing conflict has disrupted shipping routes and raised fears of supply shocks in energy markets, contributing to sharp swings in commodity prices.
The situation has been particularly sensitive because the Strait of Hormuz, a key global energy corridor, handles about 20 per cent of the world’s oil supply. Any disruption in this region can quickly push energy prices higher and ripple across financial markets.
In the UAE retail market, gold prices have fluctuated sharply throughout early March. Prices touched high levels earlier in the month before easing slightly as the dollar strengthened and investors reassessed global economic conditions.
Despite the latest dip, analysts say gold could remain volatile in the near term. Much will depend on the trajectory of oil prices, the strength of the US dollar, and the direction of global interest rates.
If geopolitical tensions intensify further, gold could regain upward momentum as investors seek safe-haven assets. However, if the dollar continues to strengthen and interest-rate cuts are delayed, the metal may struggle to rally in the short term.
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For buyers in the UAE, the current decline may present a short-term opportunity, but market watchers caution that prices are likely to remain unpredictable as global economic and geopolitical uncertainties continue to shape the precious metals market.
UAE gold dips Dh4 as oil surge and strong dollar trump safe-haven demand. Is this a buying opportunity or a sign of more volatility to come?
