Dubai Gold Prices Slump Amid Escalating US-Iran Tensions

Gold prices in Dubai dropped slightly on Wednesday as tensions between the US and Iran escalated, fueling fears of interest rate hikes in the US.

The price of 24K gold was trading at Dh528.0 per gram, while 22K, 21K, 18K, and 14K opened at Dh489.0, Dh468.75, Dh401.75, and Dh313.5 per gram, respectively.

The US-Iran conflict has led to oil prices nearing $100 a barrel, with Brent trading at $99.02 a barrel on Wednesday morning. Naeem Aslam, chief investment officer at Zaye Capital Markets, said that geopolitical developments remain the more immediate source of support for gold.

Aslam noted that President Trump's statement that oil prices could fall sharply if the conflict with Iran is won has not had an impact on markets, which continue to price supply and shipping risks. Higher oil prices can feed directly into inflation expectations, while conflict uncertainty usually increases demand for defensive assets.