Analysts point to shifting macro landscape as rising US yields and hawkish rate expectations overshadow geopolitical tensions, sidelining gold’s traditional safe-haven role.
DUBAI — Gold prices steadied in Dubai on Wednesday morning, consolidating after a volatile March that saw the precious metal lose nearly Dh73 per gram despite escalating conflict in the Middle East.
According to data from the Dubai Jewellery Group, 24K gold was trading at Dh563.50 per gram, edging up slightly from Dh563.25 at Tuesday’s close. Other variants also saw marginal gains, with 22K at Dh521.75, 21K at Dh500.25, 18K at Dh428.75, and 14K at Dh334.50 per gram.
The stability follows a turbulent month during which gold briefly plunged more than Dh100 per gram before staging a partial recovery. Despite the late rebound, the yellow metal ended March down nearly Dh73 per gram—a decline that defied expectations that ongoing military conflict in the region would drive safe-haven buying.
Globally, spot gold rose 0.63 per cent to $4,677 per ounce, while silver slipped 0.5 per cent to $74.28.
Safe-Haven Status Sidelined
Ahmad Assiri, research strategist at Pepperstone, said gold’s failure to act as a traditional safe haven throughout March signals a fundamental shift in the global macroeconomic landscape.
“Despite peak geopolitical tensions, the traditional fear trade was completely overshadowed by a surge in US Treasury yields, which supported the dollar and forced a painful downside repricing of the yellow metal,” Assiri said.
He explained that market sentiment shifted as investors began pricing in higher inflation expectations, leading to a reversal in the anticipated monetary easing path. “Investors ditched the idea of rate cuts in favor of potential hikes. For gold, an asset that provides no yield, this hawkish-leaning environment acted as a headwind for capital flows.”
Technical Breakdown and Competing Assets
Assiri noted that technical damage compounded selling pressure after gold fell below the key $5,000 per ounce level—previously viewed as a critical floor—and breached its 50-day moving average.
“The metal lost its luster to the energy complex, where extreme volatility offered a more aggressive vehicle for speculative capital,” he said. “In a month defined by risk, the market chose the yield of the dollar and the volatility of oil over the safety of gold.”
The analysis highlights a notable departure from historical patterns, where gold typically benefits from geopolitical uncertainty. With US monetary policy expectations pivoting and energy markets capturing investor attention, the traditional safe-haven trade has been temporarily eclipsed.
