Gold Holds Steady in Dubai Amid Middle East Tensions and Fed Watch

The 24-karat variety of gold was trading at Dh409 per gram in the emirate, a marginal increase from Tuesday’s closing price. Other popular variants also held firm, with 22K gold priced at Dh378.75, 21K at Dh363.25, and 18K at Dh311.25 per gram, according to Dubai Gold and Jewellery Group data

Dubai, June 18, 2025 — Gold prices in Dubai remained steady on Wednesday morning, supported by heightened geopolitical tensions and investor caution ahead of the U.S. Federal Reserve’s closely-watched policy decision later in the day.

The 24-karat variety of gold was trading at Dh409 per gram in the emirate, a marginal increase from Tuesday’s closing price. Other popular variants also held firm, with 22K gold priced at Dh378.75, 21K at Dh363.25, and 18K at Dh311.25 per gram, according to Dubai Gold and Jewellery Group data.

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In global markets, spot gold edged up 0.16 per cent to $3,394.53 per ounce as of 9:00 a.m. UAE time. The yellow metal has shown resilience over the past few weeks, underpinned by escalating conflicts and growing uncertainty over the future path of U.S. interest rates.

Wael Makarem, financial markets strategist lead at Exness, attributed the steady performance to the ongoing geopolitical instability and increased inflows into gold-backed exchange-traded funds (ETFs).

“The yellow metal could remain supported by ongoing tensions in the Middle East and continued investor inflows into gold-backed ETFs, which saw a net addition of 21.7 tonnes in the week ending June 13,” Makarem said.

“This marks the highest weekly inflow since early April and the fourth consecutive week of positive flows.”

The geopolitical backdrop remains tense. In the Middle East, Israel has stepped up its military campaign targeting Iranian infrastructure, further raising the risk premium in global markets.

Concurrently, the protracted war between Russia and Ukraine continues to erode investor confidence, prompting many to seek refuge in traditional safe-haven assets such as gold.

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“With geopolitical risks remaining elevated, investor sentiment continues to favour assets that preserve value during times of crisis,” Makarem added.

However, all eyes are now on the U.S. Federal Reserve’s policy announcement due later on Wednesday. While analysts widely expect the central bank to maintain interest rates at current levels, markets are anxiously awaiting Fed Chair Jerome Powell’s remarks for clues on the timing and magnitude of possible rate cuts later this year.

“Dovish remarks could increase the appeal of non-yielding assets like gold, while a more cautious tone could lift U.S. Treasury yields and weigh on bullion prices,” said Makarem. “Investors are also closely watching key U.S. macroeconomic indicators, including retail sales and industrial production figures, for additional signals about the economy’s strength.”

The Fed’s updated economic projections, particularly its inflation outlook and interest rate forecast, are likely to influence gold’s short-term trajectory. A shift towards a more accommodative monetary stance could further boost gold demand, especially among institutional investors seeking to hedge against economic uncertainty and currency volatility.

As the global financial landscape grapples with a mix of inflationary pressures, military conflicts, and central bank policy shifts, gold’s role as a strategic asset appears increasingly pivotal. In Dubai, a major trading hub for the precious metal, consumer interest remains strong, buoyed by both market sentiment and traditional demand.

With uncertainty dominating the global outlook, gold prices are expected to stay well-supported in the near term, especially if geopolitical and monetary pressures persist.

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