Gold Prices Soar on Global Uncertainty and Weakening Dollar

Gold prices climbed sharply this week as heightened investor anxiety surrounding stalled U.S. trade negotiations, a weakening dollar, and expectations of interest rate cuts by the U.S. Federal Reserve spurred strong safe-haven demand.

On Tuesday, spot gold rose by 0.8 per cent to $3,328.71 an ounce, while gold futures for August delivery increased by 1 per cent to $3,339.70. The gains followed a 1.5 per cent surge on Monday, nearly erasing losses from the previous week that had been driven by optimism over a temporary ceasefire between Israel and Iran.

The current rally in gold is underpinned by multiple macroeconomic factors, particularly growing concerns about the upcoming July 9 deadline set by U.S. President Donald Trump for finalising trade deals with several key countries. Investors fear a potential escalation of trade tensions if agreements are not reached, with speculation over reciprocal tariffs reaching as high as 50 per cent—especially in negotiations with Japan and other major economies.

Local Bullion Prices Respond to Global Trends

The impact of rising international gold prices is already visible in the UAE bullion market. As of Tuesday:

• 24K gold was priced at Dh400.25 per gram

• 22K gold at Dh370.75

• 21K gold at Dh355.50

• 18K gold at Dh304.75

The increase coincides with a period of renewed foot traffic at jewellery outlets across Dubai, particularly in the traditional Gold Souk and major malls, buoyed by the ongoing Dubai Summer Surprises 2025 shopping festival.

However, jewellers are cautious about sustaining momentum if gold continues trading above Dh370 per gram. “We’ve noticed some hesitancy at these elevated levels,” said a leading Dubai-based retailer. “Many savvy buyers had already booked their purchases when prices were hovering around Dh365.75, and it appears their strategy is now paying off.”

To maintain interest among price-conscious shoppers, retailers are ramping up promotions. The Dubai Summer Surprises raffle campaign has recently reduced its minimum spend threshold from Dh1,500 to Dh1,000, aiming to soften the blow of higher gold prices and drive continued in-store activity.

Markets Eye Key U.S. Economic Data

All eyes are now on critical economic releases later this week, including Thursday’s U.S. non-farm payrolls report and purchasing managers’ index (PMI) data from S&P Global and the Institute for Supply Management. These indicators are expected to provide greater clarity on the U.S. Federal Reserve’s policy outlook—potentially influencing both Treasury yields and gold’s short-term direction.

On the technical front, analysts highlight that gold has breached a key descending channel resistance on the 4-hour chart, suggesting continued upside. Prices could test the $3,350 level, which aligns with the upper boundary of the Bollinger Band and the 100-day simple moving average. A breakout above this point may pave the way for a move towards $3,377, a critical level last seen in mid-May. Meanwhile, support is expected near $3,300 and $3,275.

Global Factors Support Long-Term Outlook

Gold’s global attractiveness is further reinforced by sustained dollar weakness. The U.S. Dollar Index hovered near three-year lows during Asian trading hours, making gold—priced in dollars—more appealing to holders of other currencies. Lower yields on U.S. Treasuries are also reducing the opportunity cost of holding non-yielding bullion.

Despite a pause in geopolitical escalations, analysts believe gold remains on firm ground. Both Commerzbank and HSBC have projected that gold will trade between $3,100 and $3,500 in the third quarter, depending on global fiscal developments, currency movements, and macroeconomic indicators.

Other precious metals also saw varied movements. Silver futures rose by 0.4 per cent to $36.00 an ounce, while platinum slipped 0.4 per cent to $1,360.45. Industrial metals showed mixed performance, with copper futures on the London Metal Exchange rising 0.2 per cent to $9,839.95 per tonne, and U.S. copper futures gaining 1.2 per cent to $5.1145 per pound, following stronger-than-expected growth in China’s Caixin manufacturing PMI for June.

As global economic uncertainty lingers, gold’s reputation as a timeless store of value is once again in the spotlight—offering investors both protection and potential in uncertain times.