Due to the drop in gold prices, as reported by Khaleej Times, demand for jewellery has picked up in Dubai and the UAE, especially for 22K jewellery. Spot gold fell below $4,200 an ounce, trading at $4,192, down 1.63 percent. Silver lost 1.65 percent to $64 an ounce.
The US on Tuesday launched strikes against Iran after President Donald Trump said Tehran had shot down an American Apache helicopter in the Strait of Hormuz, deepening doubts over a potential peace deal and further straining a fragile ceasefire.
Simon-Peter Massabni, Head of Business Development at xs.com, said when geopolitical factors become intertwined with economic and monetary variables, gold’s price action tends to become less responsive to the traditional catalysts that investors have historically relied upon to assess future market direction.
“In theory, escalating tensions in the Middle East and the growing risk of a broader regional conflict should increase demand for gold as a safe-haven asset. However, what is actually occurring in the markets suggests that investors are placing greater emphasis on the strength of the US dollar and expectations surrounding Federal Reserve monetary policy. This shift has pushed gold lower, driving prices to their weakest levels in several months,” he said.
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