Dubai: Gold Prices Slip Despite US Strikes On Iranian Nuclear Sites

(MENAFN- Khaleej Times)

Contrary to market expectations, gold prices fell over Dh1 at the opening of the markets in Dubai on Monday despite US launching attacks at Iranian nuclear sites on Sunday.

The Dubai Jewellery Group data showed 24K slipping to Dh404.75 per gram on Monday morning, down from Dh406 per gram at the close of the markets over the weekend.

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Similarly, 22K, 21K and 18K also fell to Dh375.0, Dh359.0 and Dh308.25 per gram, respectively.

Spot gold was trading at $3,355.74 per ounce, down 0.39 per cent.

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Analysts were expecting gold to shoot up on Monday morning after the US joined Israel in attacking Iran's nuclear on Sunday.

On Sunday the US got involved in Middle East tensions, bombing Iranian nuclear facilities with what they call 'bunker busters' - an attempt to destroy underground nuclear infrastructure using powerful bombs. It's yet unclear how much damage the US has done, but Trump says they've caused 'monumental' damage. Now, the world is holding its breath to see how Iran will respond.

The country said that 'all options' are on the table – including trade disruptions through the Strait of Hormuz, where 20 per cent of global oil and gas flows transit. This could involve blocking the canal or attacking commercial ships, as the Houthis do.

Ahmad Assiri, research strategist at Pepperstone, said that heightened geopolitical tensions are reinforcing bullish sentiment for gold.

“I wouldn't be surprised if gold opens 1 to 1.5 per cent higher on Monday, potentially breaking above $3,400 and retesting last week's highs near $3,450,” he said.

“Further escalation or retaliation - especially if Iran or its proxies target strategic chokepoints like the Strait of Hormuz or the Strait of Mandeb - will likely keep gold well-supported at elevated levels.”

“Many remain optimistic that Iran will avoid a full-blown retaliation and regional chaos, to prevent its own oil facilities from becoming targets and to avoid a widening conflict that could hurt China - its biggest oil customer,” said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.

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