Weekly gains hold despite volatility
Globally, bullion is heading towards a third straight weekly gain, holding near $4,760 an ounce and tracking a weekly rise of nearly 2%.
Support is coming from continued central bank buying and expectations around diplomatic engagement tied to the Iran conflict. Market focus is shifting towards talks scheduled in Islamabad, where US Vice President JD Vance is expected to meet Iranian officials over the weekend.
At the same time, uncertainty has not faded. Fresh warnings from President Donald Trump around shipping through the Strait of Hormuz and continued regional strikes have kept geopolitical risk elevated, a factor that typically supports gold demand.
Inflation risks complicate outlook
The inflation backdrop remains a key variable shaping gold’s direction. Rising energy costs linked to the conflict have increased expectations that central banks may delay rate cuts or keep borrowing costs higher for longer.
That dynamic tends to weigh on gold, which does not offer yields. However, slowing growth risks tied to a prolonged conflict could eventually tilt policy in the opposite direction, supporting bullion.
Latest data already points to strain. US consumer spending showed limited growth in February, and markets are awaiting the March inflation print later Friday, which is expected to show the sharpest monthly increase since mid-2022.
Central bank demand offers support
Institutional buying continues to provide a floor for prices. Poland is pushing ahead with plans to lift gold reserves to 700 tonnes, while China added around five tonnes in March, marking its biggest monthly purchase in over a year.
This steady accumulation is helping offset some of the pressure from higher rate expectations and investor repositioning.
How prices moved this month
Dubai gold prices have shown a steady upward climb through early April before the latest dip. The month opened near Dh573 for 24K gold, followed by a gradual easing towards the Dh561 level by April 6. Prices then rebounded sharply, touching Dh577 on April 9, before slipping back to Dh573.25 on Friday. The pattern reflects a market that is reacting quickly to global cues, with short bursts of gains followed by mild corrections rather than a clear directional trend.
The latest dip offers a brief window for jewellery buyers, particularly those tracking short-term price movements. However, the broader trend remains tied to global factors including geopolitical developments, inflation data and central bank activity, all of which continue to inject volatility into gold markets.
– With inputs from Bloomberg.
Nivetha Dayanand is Assistant Business Editor at Gulf News, where she spends her days unpacking money, markets, aviation, and the big shifts shaping life in the Gulf. Before returning to Gulf News, she launched Finance Middle East, complete with a podcast and video series.
Her reporting has taken her from breaking spot news to long-form features and high-profile interviews. Nivetha has interviewed Prince Khaled bin Alwaleed Al Saud, Indian ministers Hardeep Singh Puri and N. Chandrababu Naidu, IMF’s Jihad Azour, and a long list of CEOs, regulators, and founders who are reshaping the region’s economy.
An Erasmus Mundus journalism alum, Nivetha has shared classrooms and newsrooms with journalists from more than 40 countries, which probably explains her weakness for data, context, and a good follow-up question.
When she is away from her keyboard (AFK), you are most likely to find her at the gym with an Eminem playlist, bingeing One Piece, or exploring games on her PS5.